United Technologies CEO: New aerospace giant has 'unlimited potential to grow'
United Technologies CEO Greg Hayes and Raytheon CEO Tom Kennedy responded to investor concerns' about the planned merger during an appearance on FOX Business on Wednesday.
“I know Bill [Ackman] and Dan [Loeb] are not perhaps happy with this deal because of the short-term dilution -- but you have to take the long view here,” said Hayes to Maria Bartiromo. “And as Tom and I have talked over these last 6 months, we have unlimited potential to grow this business through the innovation agenda, through all of these 60 thousand engineers we have. We have $8 billion in R&D. We will meet all of our customers’ needs and provide big value to our customers over time.”
Raytheon and United Technologies announced plans to merge in an all-stock deal, that they call a merger of equals, creating a company named Raytheon Technologies Corporation that is expected to have $74 billion in sales annually.
Activist investor Bill Ackman, in a letter to Hayes, wrote that the deal would “significantly lower the business quality” of its aerospace business. While Loeb also reportedly opposes the deal.
However Kennedy said the merger will allow the company to utilize underlying technology, which supports the defense and commercial parts of business.
“I can’t imagine a better deal than coming together in a merger of equals where you bring two great companies together,” said Hayes. “And you can have not just great financial performance but putting innovation at the forefront of what customers want and need.”
Although Hayes has not yet spoken to Ackman regarding his apprehensions, he said he plans to reach out over the “next day or two.”
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Raytheon produces defense technologies and Tomahawk missiles, and United Technologies makes Pratt & Whitney engines, which power the Airbus A320neo, Airbus A220-100 and -300 series as well as the F-35 fighter jet.
Fox Business' Matthew Kazin contributed to this report.