Third Point Says It Opposes United Technologies-Raytheon Merger

Date : 06/28/2019 @ 4:54PM
Source : Dow Jones News
Stock : Raytheon Co (RTN)
Quote : 178.19  0.0 (0.00%) @ 1:48PM

Third Point Says It Opposes United Technologies-Raytheon Merger

Raytheon (NYSE:RTN)
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By Allison Prang 

Hedge fund Third Point LLC panned United Technologies Corp.'s plan to merge with Raytheon Co. and is calling for the industrial conglomerate to rethink the transaction.

In a Friday letter to United Technologies's board, Third Point Chief Executive Daniel Loeb said UTC merging with Raytheon was a "baffling change" of strategy, given UTC's aim to make itself more focused.

UTC, which produces Pratt & Whitney jet engines, Otis escalators and elevators and Carrier heating and cooling equipment, last year said it planned to separate itself into three companies.

Third Point, a UTC investor, said it will vote against the deal in its current form.

The hedge fund said "the paucity of financial details was peculiar and alarming" given how large the deal is. A merger between UTC and Raytheon would create the world's second-largest aerospace-and-defense company by sales. Boeing Co. would be first.

Shares in United Technologies were down 0.1% in Friday morning trading, while Raytheon's shares fell 0.7%.

Following planned spinoffs, UTC and Raytheon together -- which will be called Raytheon Technologies Corp. -- would create a company valued at over $100 billion. Fifty-seven percent of the company's shares will be owned by UTC shareholders.

Third Point isn't the first activist investor to question the companies' planned combination. William Ackman, of hedge fund Pershing Square Capital Management, emailed UTC Chief Executive Greg Hayes earlier this month saying he was extremely concerned and "cannot comprehend the strategic logic" of the transaction.

Write to Allison Prang at allison.prang@wsj.com

 

(END) Dow Jones Newswires

June 28, 2019 11:39 ET (15:39 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.

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