Aerospace giant, United Technologies Corp (UTC), the parent company of aircraft interiors specialist, Collins Aerospace, has entered into a merger agreement with defence technology company, Raytheon in what they describe as “an all-stock merger of equals”. The deal, which has been unanimously approved by the boards of directors of both companies and is expected to complete in the first half of 2020, is intended to create a premier systems and technologies provider for both sectors.
The combined company, which will be named Raytheon Technologies Corporation, will also comprise fellow UTC subsidiary, engine maker Pratt & Whitney, but excludes Otis and Carrier, which are expected to be separated from UTC in the first half of 2020 – the same timeframe in which the merger is expected to close.
According to the parties, the combined company will enjoy approximately US$74 billion in pro forma 2019 sales, with a strong balance sheet and robust cash generation that can enable the resources and financial flexibility needed to support R&D and capital investment. Furthermore, Raytheon Technologies Corporation will enjoy a combined annual company and customer-funded R&D spend of approximately US$8 billion, and will have seven technology Centers of Excellence, and over 60,000 engineers at its disposal. The expanded portfolio of aerospace capabilities will also increase resilience across business cycles.
Areas of research of particular interest to the aircraft interiors sector will be cyber protection for connected aircraft; next-generation connected airspace; and advanced analytics and artificial intelligence for commercial aviation.
Another point of interest will be the name of the interiors segment. Collins Aerospace will retain its name (perhaps good for branding, given it has changed name from B/E Aerospace to Rockwell Collins, to Collins Aerospace in recent years). Collins Aerospace will be one of four businesses within Raytheon Technologies, which also include Intelligence, Space & Airborne Systems, Integrated Defense & Missile Systems, and Pratt & Whitney.
“The combination of United Technologies and Raytheon will define the future of aerospace and defence,” said Greg Hayes, UTC’s chairman and CEO. “Our two companies have iconic brands that share a long history of innovation, customer focus and proven execution. By joining forces, we will have unsurpassed technology and expanded R&D capabilities that will allow us to invest through business cycles and address our customers’ highest priorities. Merging our portfolios will also deliver cost and revenue synergies that will create long-term value for our customers and shareowners.”