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United Technologies Corp. and Raytheon Co. completed their merger Friday morning, forming one of the world's largest aerospace and defense companies in a $135 billion deal - one of the industry's largest-ever transactions.
The merger into Raytheon Technologies Corp. closes a chapter of corporate-level change for Iowa employees who, less than two years ago, worked for legacy Rockwell Collins, the city's largest employer.
Tom Kennedy, Raytheon's chairman and CEO, first pitched the idea of a merger to Greg Hayes, UTC's chairman and CEO, in early summer 2018, when UTC was busy preparing for its $30 billion acquisition of then-Rockwell Collins, which closed late that November.
The executives revisited the proposed merger later in 2018, with teams beginning work in January 2019, and an announcement June 9.
Raytheon Technologies Corp. will boast 195,000 employees worldwide, across UTC companies Collins Aerospace and Pratt and Whitney plus Raytheon's Intelligence and Space and Missiles and Defense businesses.
Collins Aerospace's avionics and mission systems business units are based in Cedar Rapids. The company has more than 10,000 people in that city, Coralville, Decorah, Bellevue and Manchester.
UTC spokeswoman Michele Quintaglie declined to comment Friday on any immediate changes planned for employees in Cedar Rapids or Collins Aerospace's other Eastern Iowa locations.
Hayes will helm the combined company, with leadership based in the Boston area. Kennedy will remain executive chairman for two years, after which Hayes will succeed him as chairman.
'Raytheon Technologies brings together two companies with combined strengths and capabilities that make us uniquely equipped to support our customers and partners during this unprecedented time,” Hayes said in a Friday news release. 'We will also play our part in the war on the COVID-19 pandemic, including doing everything we can to keep our employees around the globe safe and well.
'As we move forward, Raytheon Technologies will define the future of aerospace and defense through our focus on innovation, our world-class people and our financial and operational strength to create long-term value for our customers and shareowners.”
Collins Aerospace, which had approximately $26 billion in 2019 net sales, will establish a headquarters in Charlotte, N.C., according to the release. The company previously had an executive leadership office in West Palm Beach, Fla.
Collins Aerospace President Steve Timm, previously head of its avionics business unit in Cedar Rapids, will oversee the company based out of North Carolina, with travel to its other locations.
With projected annual sales of $74 billion, Raytheon Technologies Corp. is positioned to be second-largest aerospace and defense company in the United States, behind only Boeing. Among its product offerings for military, commercial and civil customers will be cockpit displays, jet engines, radars, sensors and hypersonic missiles.
'Today, we introduce Raytheon Technologies as an innovation powerhouse that will deliver advanced technologies that push the boundaries of known science,” Kennedy said in the release. 'Our platform-agnostic, diversified portfolio brings together the best of commercial and military technology, enabling the creation of new opportunities across aerospace and defense for decades to come.”
Immediately before the merger's closing, UTC on Friday morning spun off its Otis elevator and Carrier air-conditioner businesses as independent companies.
The merger required approvals under foreign competition laws in the European Union, Australia, Canada, the Common Market for Eastern and Southern Africa, Israel, Japan, the Republic of Korea, Taiwan and Turkey, plus foreign investment laws in Australia, France and Germany.
Since late October, antitrust regulators with the U.S. Department of Justice had requested Collins Aerospace divest its military GPS business.
A federal judge on March 27 approved a settlement among the Justice Department's antitrust division, UTC and Raytheon, under which the department approved the merger in exchange for that divestiture plus two others among the companies.
BAE Systems, a United Kingdom-based defense, aerospace and security company, announced in January it had entered a $1.925 billion purchase agreement to acquire the military GPS business.
The company said at the time it will establish a presence in the Cedar Rapids area after the UTC-Raytheon merger and take on the military GPS business' approximately 675 employees in Cedar Rapids and Coralville, without planned layoffs.
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