The Raytheon-United Technologies merger proposal aimed at amassing advanced technologies and products in defense and aerospace is drawing controversy and questions about whether the combination will reward shareholders sufficiently.
The all-stock merger of equals is aimed at producing annual cost synergies of more than $1 billion by year four and new revenue from technologies of the defense industry’s Raytheon Company (NYSE:RTN), of Waltham, Massachusetts, and United Technologies Corporation (NYSE:UTX), a Farmington, Connecticut, aerospace firm. The companies jointly announced they planned to return $18-$20 billion in capital to their shareholders during the first 36 months following completion of the merger, but some prominent investors are publicly blasting the proposed deal.
United Technologies still would carry out its planned separation into three independent companies, which would involve the sale of its Otis elevator and Carrier systems-building business units in the first half of 2020. The merger is expected to be tax-free and close by the end of first-half 2020, following the separation of the Otis and Carrier businesses from United Technologies.
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Paul Dykewicz, www.pauldykewicz.com, is an accomplished, award-winning journalist who has written for Dow Jones, the Wall Street Journal, Investor’s Business Daily, USA Today, the Journal of Commerce,Seeking Alpha, GuruFocus and other publications and websites. Paul is the editor of StockInvestor.com and DividendInvestor.com, a writer for both websites and a columnist. He further is the editorial director of Eagle Financial Publications in Washington, D.C., where he edits monthly investment newsletters, time-sensitive trading alerts, free e-letters and other investment reports. Paul previously served as business editor of Baltimore’s Daily Record newspaper. Paul also is the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz. Follow Paul on Twitter@PaulDykewicz.
