INDUSTRY NEWS Aerospace giant United Technologies and Raytheon to merge in mega-deal —  Aircraft manufacturing company United Technologies (UTC) and defense contractor and industrial corporation Raytheon have agreed to combine their aerospace and defense capabilities in one of the largest corporate mergers this year. The all-stock deal merger is expected to create a new $121 billion company that can provide advanced technologies to address rapidly growing segments within the aerospace and defense sectors. To be called Raytheon Technologies Corporation, the new company is expected to have annual revenues of $74 billion; it will be headquartered in the greater Boston metro area. Under the terms of the deal, UTC shareholders will own 57 percent of the combined company with Raytheon shareholders owning the remaining. Raytheon shareholders will receive 2.3348 shares in the combined company for each Raytheon share held. The companies expect the merger to result in $1 billion in cost synergies by the end of the fourth year. UTC owns the Pratt & Whitney engine maker and Collins Aerospace. It provides electronics, communications, and other equipment to commercial plane makers. UTC previously announced that it would spin-off the Otis elevator division and Carrier building systems unit to retain focus on aerospace. These two companies will not be part of the merger and will be separated from UTC later next year. Subject to customary closing conditions, including regulatory approvals and spin-off of the two units, the transaction is expected to close in the first half of 2020. Bombardier in talks with Mitsubishi Heavy to sell regional jet firm — Bombardier has said it is in talks with Japanese firm Mitsubishi Heavy Industries to sell its loss-making Canadair Regional Jet (CRJ) commercial aircraft business to focus on private jets. The CRJs are regional jets with a seating capacity of 50 to 104 passengers and have a maximum range around 1,800 miles. In recent years, Bombardier has concentrated on bringing the C Series airliner, rebranded as the A220, to market. (Last year, Bombardier sold part of its passenger jet operations to Airbus.) These are 100- to 150-seat aircraft that can fly twice the distance covered by CRJs. Aviation news service, The Air Current, originally reported that Mitsubishi is in negotiations to buy the CRJ and that an announcement is expected at the start of the Paris Air Show in France on June 17. Mitsubishi Heavy confirmed that it is in talks to buy the CRJ business. The company is looking for expertise to develop and certify its regional jet program, the Mitsubishi Regional Jet (MRJ). The MRJ will be Japan’s first domestically produced passenger jet, a 90-seat aircraft that is expected to compete with the CRJ and aircraft from Brazil’s Embraer. The deal, if successful, is expected to boost the production capability of the Japanese company by providing Bombardier’s patents, engineering team, sales and support network, and an installed base of customers, particularly in North America. For Bombardier, divesting the last remaining line of commercial aircraft would mark the end of 33 years of commercial aerospace history. Bombardier said that it would explore strategic options for the CRJ program. Recently, Bombardier had taken Mitsubishi Aircraft, a unit of Mitsubishi Heavy, to court over allegations that former Bombardier employees divulged trade secrets to help with the development and certification of the MRJ regional jet. Mitsubishi’s MRJ has been delayed by several years; its first customer, ANA Holdings, was supposed to receive the Mitsubishi Regional Jet in 2013, now expects the aircraft in 2020. Back to 2019-06-12 issue of C.E. Weekly Back to Members Base Camp Back to CJHunter Home Page