The new entity will be called Raytheon Technologies when the deal closes in the first half of 2020, after United Technologies completes the separation of its Otis elevator and Carrier air-conditioner businesses, the companies said.
"I will say that I did talk to a lot of people from Raytheon over the weekend who said that the combined company will be headquartered in MA, will be called Raytheon Technologies, and that one of the things that made this whole thing work was the reputation of the people in MA, their work ethic, their creativity, their imagination and, frankly, the tremendous pool of really talented STEM, both students and people who now work in the field", the governor said.
"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", Hayes said in a statement.
The Defense Department and big customers like Boeing Co, Lockheed Martin Corp and Northrop Grumman Corp will have a lot of clout in the antitrust review, and may worry about over-reliance on one company for a big suite of products. Raytheon engineers invented both the microwave oven and the Patriot missile.
A United Technologies-Raytheon merger has always been speculated on by analysts and investors as the two companies operate mainly in different segments, meaning a deal is likely to attract less scrutiny from regulators than other mergers between big defense players. The company also does some work in the commercial aerospace sector, such as in air traffic control and autonomy, artificial intelligence and machine learning.
Hayes said the merger "had been on our radar screen for years" but could not become a reality until UTC divested itself of Otis and Carrier. "The compelling logic was there".
The new company, set to be called Raytheon Technologies, will have a combined sales of $74 billion - the second-largest aerospace and defence company in the United States just behind Boeing.
Mr Trump, who has criticised big corporate deals throughout his presidency, said that he was "a little concerned" that the blockbuster merger would hurt competition in the aerospace industry. Aerospace companies have "all merged in so it's hard to negotiate" with them, he added.
Under terms, Raytheon shareowners will receive 2.3348 shares for each Raytheon share they hold. Once the merger is complete, United Technologies shareholders will own approximately 57% of the company; Raytheon shareholders will own the rest. Tom Kennedy will be appointed Executive Chairman and Greg Hayes will be named CEO of Raytheon Technologies.
UTC Chairman Gregory Hayes said he hoped to speak to the president about the proposed merger on Monday afternoon. Raytheon will contribute seven of the 15 board positions, including the lead director. The merger is expected to result in more than $1 billion in cost synergies by the end of the fourth year.
The new company will also assume about $26bn in net debt, but the two companies say it will return between $18bn and $20bn of capital to shareholders in the first three years after the merger. The new company targets an "A" credit rating at the time of closing the deal. The combined company will be reportedly headquartered in Boston, MA. Apart from developing new and critical technologies, the companies want to make advancements in developing hypersonics and future missile systems and directed energy weapons. Raytheon employs almost 70,000 globally.
United Technologies fell 1.7% to $125.84 at 9:51 a.m.in NY, posting the biggest drop on the Dow Jones Industrial Average for the second straight day.