The combined companies are expecting to return $18 to $20 billion of capital to shareholders in the first 36 months following the completion of the merger.
Greg Hayes, United's chief executive, says uniting the pair will "define the future of aerospace and defence" and have benefits for both shareholders and customers: "We will have unsurpassed technology and expanded R&D capabilities that will allow us to invest through".
The Raytheon-United Technologies merger is set to close in the first half of 2020, after United Technologies completes the separation of its Otis elevator and Carrier air-conditioner businesses, the companies said in a statement Sunday.
The combined company will be named Raytheon Technologies Corp.
The two companies argue they have very limited existing business overlap, with United Technologies specialising in supplying electronics to commercial plane makers, while Raytheon mostly manufactures guided missiles such as the anti-aircraft Patriot, which it sells to the U.S. government for up to $5 million each.More news: Love Island Confirm Leaked Sherif & Anton Fight Messages Are Fake
That means it still trails Boeing Co.in heft, but the deal may give the soon to be renamed Raytheon Technologies Corp., leverage with suppliers and contractors over other heavyweights in the industry like Lockheed Martin Corp. and Northrop Grumman Corp. "Raytheon Technologies will continue alegacy of innovation withan expanded aerospace and defense portfoliosupported by the world's most dedicated workforce", said Tom Kennedy, Chairman and CEO of Raytheon.
In the commercial aviation space, the combined company will focus on developing next-generation connected airspace, cyber protection for connected aircraft, and advanced analytics and artificial intelligence.
Sen. Chris Murphy, D-Conn., said he intends to work closely with state government officials, the Justice Department and the Pentagon to "to ensure this merger does not violate the agreement UTC signed with the state".
Raytheon shareholders will receive 2.33 shares in the new company for each Raytheon share. "But I have to negotiate - meaning the United States has to buy things, does that make it less competitive?" United Technologies provides plane makers with electronics, communications and other equipment, while Raytheon primarily supplies the US government with military aircraft and missile equipment. Hayes will become chairman and CEO two years after the deal closes.
The Senate Armed Services Committee may press Shanahan about the merger - and whether he should recuse himself from deliberations on it because of his past role as an executive with Boeing Co., a United Technologies customer - at his expected confirmation hearing for defense secretary.More news: Three officially announces 5G plans for the UK
Raytheon Technologies will be based near Boston.
Technology is no longer changing in "a linear fashion", Raytheon CEO Thomas Kennedy told analysts, saying the speed of change is "exponential" in many instances.
United Technologies businesses include engine maker Pratt & Whitney.
"The company should be expected to make a strong play for the Defense Department's emerging hypersonic missiles programs", the Post reported.More news: World Health Organisation confirms Ebola case in Uganda