President Trump expressed concern Monday about the merger between United Technologies and defense contractor Raytheon, questioning whether the move would hurt competition and make it more difficult for the United States to negotiate defense contracts in the future.
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“I’m a little concerned about United Technologies and Raytheon,” Trump told CNBC’s Squawk Box in a phone interview.
The president continued by noting that there were many airline companies until they “all merged in so it’s hard to negotiate." He added that both companies are “great” but said he worried that the merger would “take away more competition.”
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“When I hear United Technology, which is a great company, I know it well…but when I hear United and Raytheon…are merging, does that take away more competition?” Trump asked. “It becomes one, big, fat, beautiful company, but I have to negotiate – meaning the United States has to buy things.”
President Trump said he was concerned United Technologies-Raytheon merger would create less competition. (AP)
“Does [the merger] make it less competitive? Because it’s already not competitive,” Trump added. “I just want to see competition. They’re two great companies, I love them both. But I want to see that we don’t hurt our competition.”
United Technologies and Raytheon announced Sunday an agreement to merge in an all-stock deal described as a “merger of equals.” The move creates a new company that will be called Raytheon Technologies Corporation which would have an estimated annual sales of $74 billion. United Technologies has a current market value of $114 billion while Raytheon’s is about $52 billion.
“By joining forces, we will have unsurpassed technology and expanded R&D capabilities that will allow us to invest through business cycles and address our customers' highest priorities,” United Technologies CEO Greg Hayes said in a statement. “Merging our portfolios will also deliver cost and revenue synergies that will create long-term value for our customers and shareowners."
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.
Once the deal closes, the new company will become the second-largest aerospace and defense company in the U.S. behind Boeing. Trump has ties with Boeing and previously pressured U.S. allies to buy the company's products, Reuters reported. Boeing has faced backlash following two deadly plane crashes that led to the grounding of Boeing 737 Max aircraft.
Fox Business' Matthew Kazin contributed to this report.