Two major defense contractors, Raytheon and United Technologies, have been in advanced talks in consideration of a mutually beneficial merge.
In 2018, it was reported that United Technologies was planning a three-way split, with each separate part becoming a standalone company by 2020. Also noted was that the company was planning to sell off Carrier and Otis Elevators divisions in order to refocus the company brand on specific industries.
United Technologies has been growing, having bought defense and aviation contractor Rockwell Collins for upward of $30 billion.
While these recent talks won’t alter those 2020 plans, the new company is expected to be valued at over $100 billion post-merger, coming in second only to Boeing.
The other company in the pairing, Raytheon, is a major US defense contractor which makes military products, such as sensor and communication airplane and satellite systems, missile defense systems, semiconductors and so on. The company production ranges from air conditioners and elevators to F-15 and F-35 fighter jets to civilian aircraft such as Airbus and Gulfstream.
If the deal between United Technologies and Raytheon goes through, it would allow the companies to complement one another, filling in the gaps in knowledge and production to gain a more comprehensive grasp within the defense industry tech world.
With such a huge company, many analysts believe that the company would become such a behemoth that it would be impervious to downtrends in the industry, capable of weathering fluctuations.
Other analysts predict that the Pentagon will likely cut down on buying new airplanes, missiles and other tech as the merger finalizes and solidifies over the next few years.