Raytheon and United Technologies have entered into an agreement to combine the two companies to create an aerospace and defense giant, in one of the biggest mergers of this year. The combined company will go by the name of Raytheon Technologies. Raytheon Technologies will offer expanded technology and R&D capabilities, said the companies in a statement. The company is expected to have approximately $74 billion in 2019 sales revenue.

Under the terms of the merger, United Technologies shareholders would own 57 per cent of Raytheon Technologies, with Raytheon shareholders making up for the rest. The combination excludes Otis and Carrier, which are expected to be separated from United Technologies in the first half of 2020. Collins Aerospace and Pratt & Whitney are part of the deal. The merger is expected to close in the first half of 2020.

“The combination of United Technologies and Raytheon will define the future of aerospace and defense,” said Greg Hayes, United Technologies Chairman and CEO, in a news release. “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 Chairman and CEO.

United Technologies is expected to have a company and customer funded R&D spend of approximately $8 billion, seven technology Centers of Excellence, and over 60,000 engineers.

Raytheon plans to consolidate its four businesses into two businesses to be named Intelligence, Space & Airborne Systems and Integrated Defense & Missile Systems. The new businesses will join Collins Aerospace and Pratt & Whitney to form the four businesses of Raytheon Technologies.

The combined company’s board of directors will be comprised of 15 members, consisting of eight directors from United Technologies and seven from Raytheon, with the lead director from Raytheon. Tom Kennedy will be appointed executive chairman and Greg Hayes will be named CEO of Raytheon Technologies. Two years following the close of the transaction, Mr. Hayes will assume the role of Chairman and CEO.

Raytheon Technologies will be headquartered in the greater Boston metro area, and will retain a corporate presence in existing locations.

[Image courtesy: Raytheon Technologies]