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Raytheon Co. (Waltham, Mass., U.S.) and United Technologies Corp. (Farmington, Conn., U.S.) recently signed a merger agreement to combine the two companies under the name Raytheon Technologies Corp. The transaction is expected to close in the first half of 2020.

The new merged company is expected to combine Raytheon’s defense technology and United Technologies' aerospace and defense technologies, to provide expanded technology and R&D capabilities for customers and U.S. defense.

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According to Raytheon, the new company will have a combined annual company and customer funded R&D spend of approximately $8 billion, seven technology Centers of Excellence and more than 60,000 engineers. Areas of joint advancement include: hypersonics and future missile systems; directed energy weapons; intelligence, surveillance, and reconnaissance (ISR) in contested environments; cyber protection for connected aircraft; next-generation connected airspace; and advanced analytics and artificial intelligence for commercial aviation.

Under the terms of the agreement, Raytheon shareowners will receive 2.3348 shares in the combined company for each Raytheon share. Upon completion of the merger, United Technologies shareowners will own approximately 57% and Raytheon shareowners will own approximately 43% of the combined company on a fully diluted basis. The merger is expected to close in the first half of 2020, following completion by United Technologies of the previously announced separation of its Otis and Carrier businesses.

“Raytheon Technologies will continue a legacy of innovation with an expanded aerospace and defense portfolio supported by the world’s most dedicated workforce,” says Tom Kennedy, Raytheon chairman and CEO. “With our enhanced capabilities, we will deliver value to our customers by anticipating and addressing their most complex challenges, while delivering significant value to shareowners.”

“The combination of United Technologies and Raytheon will define the future of aerospace and defense,” says Greg Hayes, United Technologies 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.”