UTX CEO optimistic Raytheon merger will likely be accomplished inside 9 months
United Applied sciences Company (UTC) CEO Greg Hayes believes a “compelling” know-how argument within the proposed merger with Raytheon will assist to win over involved shareholders.
UTC and Raytheon introduced they’d agreed an all-stock merger earlier this month. The deal, which the 2 corporations known as a “merger of equals,” would convey collectively a booming aerospace firm with a large authorities protection contractor.
It’s anticipated to shut within the first half of 2020.
Nonetheless, the proposal has raised questions amongst regulators and shareholders in regards to the financial advantages and prices of enormous mergers.
“If you think about the regulatory landscape, which is the first question in terms of the timing, there is zero overlap,” Greg Hayes, CEO of UTC advised CNBC’s Phil LeBeau on the Paris Airshow on Monday.
“From a regulatory standpoint, we think nine months at the outsight to get this done. Ten countries, it does not require Chinese approval, so we think we have got a pretty clear path,” Hayes stated.
Raytheon has been ‘on our radar for a very long time’
President Donald Trump advised CNBC in an unique interview final week that he was a “little concerned” the proposed deal might hurt competitors and make it tougher for the U.S. authorities to barter protection contracts.
Raytheon and UTC have each since dismissed considerations a couple of doable discount in competitors, saying they’ve little or no overlap that might typically spark concern amongst anti-trust regulators.
“As far as objections from shareholders, I think, again, the more we talk about technology, the more they see the benefits, the easier this is going to be to convince people,” Hayes stated.
The brand new firm, to be known as Raytheon Applied sciences, would turn into the second-largest aerospace and protection firm within the U.S. after Boeing with an estimated $74 billion in gross sales.
Raytheon Worldwide CEO John Harris advised CNBC Monday that he couldn’t bear in mind a time when the 2 corporations had been competing over the previous 35 years.
United Applied sciences Chairman and CEO Greg Hayes.
Brendan McDermid | Reuters
Harris additionally stated he didn’t see the Raytheon and UTC deal as a sign of extra mergers within the aerospace business.
“As we have talked to the customers, as we have talked to the Department of Defense, they have been very intrigued by the opportunities that the merger gives,” UTC’s Hayes stated.
“Obviously, investors were a little bit surprised. I tell people, look, this is the final piece of the puzzle for UTC in terms of our journey from a conglomerate multi industry to a focused A&D (aerospace and defense) company.”
“I was joking with the folks at Raytheon that they have been on our radar for a long time. Of course, they are the preeminent company in the world,” he added.