Home / M&A Activity / Raytheon-UTC Deal Comes as DoD Eyes New Priorities; Pierre Chao Offers Insight on M&A Trend

Raytheon-UTC Deal Comes as DoD Eyes New Priorities; Pierre Chao Offers Insight on M&A Trend

Pierre Chao

The planned merger between Raytheon (NYSE: RTN) and United Technologies Corp. (NYSE: UTX) comes as the aerospace-and-defense sector anticipates slower growth in the Department of Defense’s spending and as DoD sets its sights on hypersonic missiles, space systems and other new priorities, The Wall Street Journal reported Wednesday.

As the number of weapons platforms has dwindled, Pierre Chao, a defense consultant at Renaissance Strategic Advisors, said policymakers should not be surprised about the consolidation in the A&D industry.

“We’ve let market forces create the ‘bigs,’” Chao said.

Some analysts noted that the proposed Raytheon-UTC combination is likely within an acceptable degree since both companies do not produce the same lines of products.

“I feel this proposed merger is right at the line of what would be allowable,” said Andrew Hunter, a senior fellow at the Center for Strategic and International Studies.

President Donald Trump “expressed concern ‘if they have the same products,’” said Byron Callan, an analyst with Capital Alpha Partners. “They don’t.”

Check Also

Defense Innovation Unit Issues Solicitations for Satcom Antenna System, Dismounted PNT Device

The Defense Innovation Unit has released solicitations for a multidomain tactical communications system and dismounted assured positioning, navigation and timing platform.

Sehlke Consulting Gets Navy Systems Integration Support Contract; Chad Sehlke Quoted

Sehlke Consulting has received a five-year contract to support the Department of the Navy's Budget Submitting Offices in systems integration efforts. The company said Friday it will provide help desk services, integrate systems, analyze abnormal accounts and report financial activities under the contract.