President Trump is worried United Technologies-Raytheon merger will kill competition
Posted June 10, 2019 10:38 a.m. EDT
CNN — Industrial conglomerate United Technologies and defense company Raytheon are set to merge, but the deal has at least one big critic: President Donald Trump.
In an interview Monday, Trump voiced his concern about the merger that would create an aerospace and defense powerhouse, saying it could kill competition.
"I'm a little concerned about United Technologies and Raytheon," the president said during a phone interview on CNBC's "Squawk Box."
Trump expressed worry that many defense companies have merged in the past, adding that it's harder for the United States to negotiate on products like airplanes when there are fewer businesses to choose from.
The UTC-Raytheon merger begs the question: "Does that take away more competition?" Trump said. He added that as far as he understood, there is some overlap between the companies' products.
But Gregory Hayes and Thomas Kennedy, CEOs of United Technologies and Raytheon respectively, said in a subsequent CNBC "Squawk Box" interview that there is no product overlap, adding that there is nothing anti-competitive about the tie-up.
Market analysts said they didn't expect any regulatory or antitrust issues with the merger.
"We do not envision any opposition to the transaction from the DoD or other regulatory parties," wrote Stifel analysts Joseph DeNardi and Jonathan Ladewig.
The companies announced they would combine in a "merger of equals" late Sunday. The combined businesses, trading under the name Raytheon Technologies Corporation, will have some $74 billion in sales. Their combined market value is around $166 billion.
The merger comes just months after UTC announced it would spin off its Otis elevator business and Carrier building systems division, leaving the remaining company to focus on aerospace.
UTC and Raytheon did not immediately return calls for comment.
Shares of UTC were down 1% shortly after Monday's market open, while Raytheon stock rose about 1%.