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June 10 (UPI) -- United Technologies and Raytheon announced a "merger of equals" that would form a combined company with revenues of $74 billion and valuation of $166 billion. The combined company will be named Raytheon Technologies Corp. The deal will return $18 to $20 billion back to shareholders in the first 36 months after closing, expected in the first half of 2020, the companies said in an announcement on Sunday.
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United Technologies shareholders would own 57 percent of the combined company, with Raytheon shareholders owning the rest. UTC makes jet engines, including those produced by its Pratt & Whitney and Collins Aerospace subsidaries. Raytheon makes everything from missiles and missile defense systems to radars and cybersecurity solutions.
"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. "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."
Hayes will be named CEO of Raytheon Technologies, with Tom Kennedy, current CEO and chairman of Raytheon, as executive chairman of the combined company. In two years, Hayes will rise to the role of chairman and CEO, the company said.
As a result of the merger, UTC will spin off its Otis elevator division and the Carrier building systems unit so it can focus entirely on aerospace.
The merger is expected to be one of the largest of the year.
