The Raytheon Co. and United Technologies Corp. are merging in an all-stock deal that the two companies say is a merger of equals. The new company's name will be Raytheon Technologies Corp. — and it's expected to have nearly $74 billion in annual sales.

The new defense and aerospace company would be second only to Boeing in the U.S., according to the latest Forbes 500 rankings by annual revenue. On that list, Boeing had more than $101 billion in revenue while another rival, Lockheed Martin, racked up $53.7 billion, according to Forbes.

"The combination of United Technologies and Raytheon will define the future of aerospace and defense," United Technologies Chairman and CEO Greg Hayes said in a statement about the deal.

Hayes is set to become the leader of the new company: He'll take the titles of chairman and CEO two years after the merger is finalized.

Under the deal, United Technologies' shareholders will own about 57% and Raytheon shareholders will own about 43% of the merged company. Both Raytheon's and United Technologies' board of directors have unanimously approved the merger, which is expected to close during the first half of 2020.

The headquarters of Raytheon Technologies will be in the Boston metro area, the companies say. Raytheon is currently based in Waltham, Mass., while United Technologies is based in Farmington, Conn.

The deal brings together two companies that have been integral to the U.S. technological explosion in the past nearly 100 years. United Technologies' list of accomplishments range from transmitting the first photo via satellite to receiving the first GPS signal. Raytheon's engineers invented both the microwave oven and the Patriot missile. In 1997, Raytheon acquired trailblazing Hughes Aircraft, which was founded by late billionaire Howard Hughes.

"Raytheon Technologies will continue a legacy of innovation with an expanded aerospace and defense portfolio supported by the world's most dedicated workforce," said Tom Kennedy, Raytheon's current chairman and CEO. He'll be the new company's executive chairman.

The merger is subject to approval by government regulators, as well as by the two companies' shareholders. But the pair have already unveiled a website touting their merger.

Under the deal, the new Raytheon Technologies will consolidate its operations into four businesses. One will be based on intelligence and aerospace and another based on defense and missile systems. Those entities will join Collins Aerospace (the recently acquired Rockwell Collins Inc.) and jet engine-maker Pratt & Whitney — two of United Technologies' high-revenue divisions.

"By joining forces, we will have unsurpassed technology and expanded R&D capabilities," Hayes said. "Merging our portfolios will also deliver cost and revenue synergies that will create long-term value for our customers and shareowners."

By the time the deal closes, United Technologies is expected to have finished spinning off its Otis and Carrier businesses — a move that was announced previously as part of a focus on aerospace and engines.

Copyright 2019 NPR. To see more, visit https://www.npr.org.

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