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Raytheon Technologies Begin Trading as Merger of Equals Closes

Zacks Equity Research

Raytheon Technologies Corporation (RTX) came into existence as the all-stock merger of equals between the United Technologies Corporation’s aerospace business — comprising Pratt & Whitney, and Collins Aerospace Systems — and Raytheon Company consummated on Apr 3, 2020. The merger deal was originally announced in June 2019.

As noted, United Technologies survived the merger and presently dons the name of Raytheon Technologies Corporation. It is trading on the NYSE under the new ticker symbol “RTX”. However, Raytheon Company stopped trading on the NYSE (its ticker symbol was RTN) beginning Apr 3. For each of its shares now shareholders can gain United Technologies’ 2.3348 shares.

Raytheon Technologies ended the trading session at $49.93 on Apr 3. The closing price was 2.1% below the day’s opening price of $51.00.

Inside the Headlines

It is worth mentioning here that the completion of the merger could only be accomplished with the fulfillment of an important precondition — separation of Otis and Carrier businesses of United Technologies into two independent companies. The Otis business is presently known as Otis Worldwide Corporation and trading on the NYSE under the ticker symbol “OTIS”, whereas the Carrier business, known as Carrier Global Corporation, is trading under the ticker symbol “CARR”.

Raytheon Technologies specializes in sophisticated products and services (considered the most advanced globally) for defense and government markets. The company is based in Waltham, MA. In 2019, its proforma net sales were $74 billion and it employed 195,000 people.

Of Raytheon Technologies’ total shareholding, roughly 57% is with United Technologies, while the rest is with Raytheon. Its board of directors comprises eight members from United Technologies and seven from Raytheon.

In the initial 36 months of the merger completion, Raytheon Technologies intends on rewarding shareholders with $18-$20 billion. The company’s annual run-rate cost synergies will likely be $1 billion in the first four years. Of this, annual savings of $500 million will be returned to shareholders.

As regards to its business segments, Raytheon Technologies will report under four segmental heads — including Collins Aerospace Systems, Pratt & Whitney, Raytheon Intelligence & Space, and Raytheon Missiles & Defense.

Important Names in the Aerospace Arena

Some important players engaged in providing products and services in the aerospace and defense arena are General Electric Company GE, Honeywell International Inc. HON, Northrop Grumman Corporation NOC and Lockheed Martin Corporation LMT.

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Northrop Grumman Corporation (NOC) : Free Stock Analysis Report
 
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Lockheed Martin Corporation (LMT) : Free Stock Analysis Report
 
General Electric Company (GE) : Free Stock Analysis Report
 
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