Top Pentagon official has "no major concerns" with Raytheon-UTC deal
The positive words are a significant step in the right direction for a transaction expected to face significant government scrutiny, writes Lou Whiteman for The Motley Fool.
WASHINGTON - A review of the planned merger between Raytheon and the aerospace business of United Technologies Corp. is proceeding smoothly, according to the Defense Department official responsible for procurement. The deal still has a number of hurdles to clear before it's completed, but the positive words are a significant step in the right direction for a transaction expected to face significant government scrutiny, writes Lou Whiteman for The Motley Fool. Continue reading original article
The Intelligent Aerospace take:
August 30, 2019-If approved, the new company, Raytheon Technologies Corp., will be created via an exchange of shares between the two firms, with the merger expected to conclude in the first half of 2020, they said in a joint statement. Raytheon is best known for its Patriot air defense systems, which gained fame during the first Gulf War, and its Tomahawk cruise missiles, often the first weapons fired from U.S. navy ships in recent conflicts. United Technologies (UTC) is a big player in the aeronautics industry with its Pratt and Whitney engines, which are used in civil and military aircraft, including the F-35 multi-role stealth fighter, considered one of the most advanced combat aircraft in the world.
The Pentagon's opinion matters in this announced merger as it blocked an attempted takeover of Northrop Grumman by Lockheed Martin in 1998. There isn't as much commonality between Raytheon and UTC as NG and LM, as Whiteman explains that only 5% of the defense business the two companies have overlaps on Pentagon projects. Even if the merger gets the blessing from the Pentagon, it will still have to pass muster with the Department of Justice.
Jamie Whitney, Associate Editor