Business

United Technologies-Raytheon merger wins shareholder approval

UTC is the parent company of Collins Aerospace, Cedar Rapids’ largest employer. (Liz Martin/The Gazette)
UTC is the parent company of Collins Aerospace, Cedar Rapids’ largest employer. (Liz Martin/The Gazette)

Shareholders for United Technologies Corp. and Raytheon Co. are on board with the companies’ proposed $135 billion merger.

A majority of shareholders for both companies approved measures Friday morning that were key regulatory prerequisites for them to form Raytheon Technologies Corp., as a gargantuan “premier systems provider with advanced technologies.”

“Today is an important milestone in our transformational merger, which will define the future of aerospace and defense,” UTC CEO Greg Hayes said in a news release.

“With our technological and R&D capabilities, Raytheon Technologies will deliver innovative and cost-effective solutions aligned with the highest customer priorities for decades to come.”

“Today’s vote reflects a significant step on our path to unite two world-class companies with complementary technologies and supports our view that this merger of equals will create additional growth opportunities while delivering benefits to our shareowners, customers and employees,” said Raytheon CEO Tom Kennedy.

As a new entity, Raytheon Technologies Corp. has been touted as a potential one-stop-shop for aerospace and defense technologies, including hypersonic missiles, directed-energy weapon systems and air traffic control solutions for use in the “next-generation connected airspace.”

The new company would be one of the world’s largest aerospace companies and the second-largest defense company, behind Lockheed Martin Corp.

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UTC and Raytheon shareholders will own 57 percent and 43 percent, respectively, of Raytheon Technologies Corp., and control a respective eight and seven of the new company’s 15-person board of directors.

Officials project Raytheon Technologies will generate around $74 billion in annual revenue and invest $8 billion into R&D each year.

Though two activist investors in UTC spoke out against the proposed merger since its June 9 announcement, they have since sold part or all of their shares in the company, through early August.

UTC is the parent company of Collins Aerospace, Cedar Rapids’ largest employer. More than 10,000 of Collins Aerospace’s approximately 73,300 employees now work in Cedar Rapids, Coralville, Decorah, Bellevue and Manchester.

The companies’ checklist before they can close on the merger includes getting the green light from U.S. regulators — potentially at the Federal Trade Commission or U.S. Justice Department — and obtaining a dozen approvals from other countries, including under competition and foreign investment laws.

The merger agreement also stipulates that UTC spin off its Otis elevator and Carrier air-conditioner businesses before it consummates the deal.

UTC and Raytheon executives have said the merger is expected to be completed in the first half of 2020.

Comments: (319) 398-8366; thomas.friestad@thegazette.com

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