RTN - Raytheon Company

NYSE - Nasdaq Real Time Price. Currency in USD
-0.03 (-0.02%)
As of 3:21PM EDT. Market open.
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Previous Close179.99
Bid180.09 x 900
Ask180.12 x 800
Day's Range179.55 - 180.97
52 Week Range144.27 - 210.89
Avg. Volume1,909,660
Market Cap50.126B
Beta (3Y Monthly)1.15
PE Ratio (TTM)16.78
Earnings DateN/A
Forward Dividend & Yield3.77 (2.09%)
Ex-Dividend Date2019-07-09
1y Target EstN/A
Trade prices are not sourced from all markets
  • Raytheon's Harris Says United Technologies Deal Is Complementary
    Bloomberg2 days ago

    Raytheon's Harris Says United Technologies Deal Is Complementary

    Jun.17 -- John Harris, chief executive officer of Raytheon Co.'s international arm, discusses the proposed takeover of the company by United Technologies Corp. He speaks with Guy Johnson at the Paris Air Show on "Bloomberg Daybreak: Europe."

  • 3 Aerospace Stocks to Bolster a Portfolio
    Zacks4 hours ago

    3 Aerospace Stocks to Bolster a Portfolio

    Here are some companies that have performed well so far this year and, based on analyst expectations, could continue to perform well.

  • Reuters4 hours ago

    Elbit eyes acquisition opportunities from Raytheon-UTC deal

    Israel-based Elbit Systems on Wednesday said it would keep an eye out for possible acquisitions if the proposed merger of U.S. aerospace companies Raytheon Co and United Technologies Corp triggers certain divestments. Kril said Elbit was committed to expanding in the United States, and would keep a close eye on any possible divestments ordered by U.S. authorities reviewing the proposed merger.

  • Heico Stock Can Keep Your Portfolio Soaring
    InvestorPlace6 hours ago

    Heico Stock Can Keep Your Portfolio Soaring

    Heico Corp (NYSE:HEI) has been around since 1957. And since that time it has grown its business into a global provider of parts and equipment for aircraft, defense and industrial companies.Source: Karen Neoh via FlickrGiven all the talk generated in recent days by the merger between United Technologies (NYSE:UTX) and Raytheon (NYSE:RTN), it seemed timely to discuss other specialized and successful companies in the sector that don't get many headlines on a regular basis. The Landscape for HEI StockOf course, there's also the issue with Boeing (NYSE:BA) and its 737 Max8 grounding, which continues. Initially the airlines that owned the planes thought this was going to be a brief suspension of service but it continues to drag on as BA has released a greater number of protocol issues in drips and drabs, rather than coming clean at the outset of the investigation.InvestorPlace - Stock Market News, Stock Advice & Trading TipsAt this point, there are other models that are now getting a good look after some concerns in production have been unearthed in the Max investigation.Add to that the delays that are happening with General Electric's (NYSE:GE) GE9x new engines for BA's massive 777X. * 7 Value Stocks to Buy for the Second Half What all this means for Heico is extra business. You see, modern aircraft are precision machines, and that means they perform at optimal levels, and that means parts wear out quickly.With fewer new planes deployed in airlines' fleets, the demand for parts increases. And that's very good news for HEI stock. In the past year, Heico is up 72% and it's up 66% year to date. Yet, it's only trading at a 58x trailing price-to-earnings ratio. Granted that's not a bargain, but it's below its growth rate.HEI reported fiscal Q2 numbers in late May, and they easily beat analysts' estimates as a whole. Each division also performed well.Another strength for Heico is that it works on both the defense and aerospace side of things as well as commercial aircraft. This means it's not beholden to growing defense budgets or winning those long-term contracts.Its global presence also allows it diversification into the powerful growth happening in commercial travel and logistics in Asia, particularly China. Its long history in the business demonstrates its ability to compete in this dynamic and expanding market.And with just a $15 billion market cap, this could very well be a takeover target for an airplane maker or an industrial conglomerate looking to get a foothold in the sector.Certainly the U.S. defense sector has been the center of attention recently with the UTX-RTN merger, but it's the commercial side that holds the greatest long-term potential.And with private companies moving into the space race, this is another big opportunity for Heico to grow its business. All this is why my Portfolio Grader gives HEI stock a strong A rating.Louis Navellier is a renowned growth investor. He is the editor of four investing newsletters: Growth Investor, Breakthrough Stocks, Accelerated Profits and Platinum Growth. His most popular service, Growth Investor, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Value Stocks to Buy for the Second Half * 7 Hot Stocks to Buy for a Seemingly Sleepy Summer * 6 Chip Stocks Staring At Big Headwinds in 2019 Compare Brokers The post Heico Stock Can Keep Your Portfolio Soaring appeared first on InvestorPlace.

  • MoneyShow9 hours ago

    Look into Lockheed

    What do tariffs, Mexico, Europe and the defense industry have in common? asks John Markman, a leading growth stock expert and editor of Strategic Advantage.

  • Trump Today: President sets ‘extended’ meeting with Xi as he rebukes Draghi over possible new stimulus
    MarketWatch23 hours ago

    Trump Today: President sets ‘extended’ meeting with Xi as he rebukes Draghi over possible new stimulus

    President Donald Trump on Tuesday said he’d hold “extended” talks with Chinese President Xi Jinping at next week’s G-20 summit, as he rebuked European Central Bank President Mario Draghi over a possible move to provide further monetary stimulus.

  • Two Defense Giants Join Forces Against Lockheed In Hypersonics
    Investor's Business Daily23 hours ago

    Two Defense Giants Join Forces Against Lockheed In Hypersonics

    Raytheon and Northrop Grumman shares jumped Tuesday after the defense contractors announced they were teaming up to build hypersonic weapon engines.

  • American City Business Journalsyesterday

    Developer hunts big tenant, not equity, for $700M project

    "The types of developments our clients are looking for, Aureum fits that to a tee," says developer with a client roster including J.P. Morgan, Liberty Mutual, Toyota, State Farm and defense contractor Raytheon.

  • The Zacks Analyst Blog Highlights: Boeing, Lockheed, Raytheon, General Dynamics and Huntington

    The Zacks Analyst Blog Highlights: Boeing, Lockheed, Raytheon, General Dynamics and Huntington

    The Zacks Analyst Blog Highlights: Boeing, Lockheed, Raytheon, General Dynamics and Huntington

  • Markityesterday

    See what the IHS Markit Score report has to say about Raytheon Co.

    Raytheon Co NYSE:RTNView full report here! Summary * Perception of the company's creditworthiness is positive * ETFs holding this stock are seeing positive inflows * Bearish sentiment is low * Economic output in this company's sector is contracting Bearish sentimentShort interest | PositiveShort interest is extremely low for RTN with fewer than 1% of shares on loan. This could indicate that investors who seek to profit from falling equity prices are not currently targeting RTN. Money flowETF/Index ownership | PositiveETF activity is positive. Over the last month, ETFs holding RTN are favorable, with net inflows of $12.96 billion. Additionally, the rate of inflows is increasing. Economic sentimentPMI by IHS Markit | NegativeAccording to the latest IHS Markit Purchasing Managers’ Index (PMI) data, output in the Industrialsis falling. The rate of decline is very significant relative to the trend shown over the past year, and is accelerating. The rate of contraction may ease in the coming months, however. Credit worthinessCredit default swap | PositiveThe current level displays a positive indicator. RTN credit default swap spreads are decreasing and near the lowest level of the last three years, which indicates improvement in the market's perception of the company's credit worthiness.Please send all inquiries related to the report to score@ihsmarkit.com.Charts and report PDFs will only be available for 30 days after publishing.This document has been produced for information purposes only and is not to be relied upon or as construed as investment advice. To the fullest extent permitted by law, IHS Markit disclaims any responsibility or liability, whether in contract, tort (including, without limitation, negligence), equity or otherwise, for any loss or damage arising from any reliance on or the use of this material in any way. Please view the full legal disclaimer and methodology information on pages 2-3 of the full report.

  • Raytheon Wins $30M Deal to Support Block IV Tomahawk Missile

    Raytheon Wins $30M Deal to Support Block IV Tomahawk Missile

    Raytheon's (RTN) Tomahawk missiles is equipped to fly into heavily defended airspace more than 1,000 miles away to conduct precise strikes on high-value targets.

  • Financial Timesyesterday

    Patrick Shanahan steps down as acting Pentagon chief

    President Donald Trump has announced that the acting US defence secretary Patrick Shanahan was stepping down from the post and withdrawing his nomination as the permanent head of the Pentagon. Writing on Twitter on Tuesday, Mr Trump said Mr Shanahan, a former Boeing executive, “has done a wonderful job” but decided not to go forward with the confirmation process in order to spend more time with his family. Earlier in the day USA Today reported that the FBI had been looking into allegations of domestic violence within the Shanahan family, complicating the background check that all senior officials must have as part of their confirmation process.

  • Northrop engine teams with Raytheon hypersonic program

    Northrop engine teams with Raytheon hypersonic program

    The Pentagon plans to spend billions of dollars on developing hypersonic weapons in the coming years as Russia and China work on similar capabilities. Northrop's scramjet engine technology uses the vehicle's high speed to forcibly compress incoming air before combustion to enable sustained flight at hypersonic speeds. Several weapons makers are competing against the Raytheon and Northrop team to develop the Hypersonic Air-breathing Weapon Concept, or HAWC program.

  • Bloomberg2 days ago

    GE and Honeywell Stare Down a $74 Billion Monster

    (Bloomberg Opinion) -- United Technologies Corp. CEO Greg Hayes dropped the bombshell news of his company’s merger with missile-maker Raytheon Co. just days before the start of the Paris Air Show, thereby ensuring rivals would have to answer questions about the deal at the industry’s premier event. The deal will turn United Technologies into a $74 billion commercial aviation and defense powerhouse, with the kind of scale and negotiating leverage that was previously only enjoyed by Boeing Co. and Airbus SE. Management at General Electric Co. and Honeywell International Inc. don’t seem in any rush to respond in kind, and they aren’t so sure bigger is better. But the United Technologies-Raytheon merger is so big that it will be impossible for them to ignore it.“We’ve never really considered scale as a part of our strategy,” Tim Mahoney, CEO of Honeywell Aerospace, said in an interview at the Air Show on Monday. The company prioritizes differentiated products that are more than a “me-too” and believes that will ultimately give it an advantage with manufacturers and airlines, he said. GE’s David Joyce, who heads up the company’s aerospace business, echoed that thought in a Bloomberg TV interview: “That merger may have scale but we have the right technologies and engines to be competitive.”During a media briefing earlier in the day, Joyce touted the advantages of GE’s Leap engine over the rival geared turbofan from United Technologies’ Pratt & Whitney arm, including what he says is a $1.4 million advantage in residual value and 6% better utilization. After the merger, GE’s biggest jet engine rivals will continue to be Pratt & Whitney and Rolls-Royce Holdings Plc, and “I feel really good about our positioning relative to either of those competitors right now,” Joyce said. The “right now” part of that sentence seems key. No, GE isn’t gaining a new competitor, but it is going to see a very different one.United Technologies and Raytheon are targeting $8 billion in annual R&D spending. GE Aviation spent $1.5 billion on R&D in 2018, including contributions from customers, according to its annual filing. That would put the aviation unit’s R&D spending at about 5% of sales. At the media briefing, Joyce said GE Aviation spends about 8% of its sales on R&D, which is based on $2.4 billion in total “engineering” spend. Either way, it’s less than the nearly 11% of United Technologies-Raytheon’s combined sales that will be devoted to investing in new products. Honeywell doesn’t disclose R&D spending by division, but spent $1.8 billion on company-sponsored R&D across all its businesses in 2018, according to its 10K. That’s roughly 4.3 percent of its total sales last year.The dollar amount isn’t everything. As GE itself knows far too well from its experience going down the rabbit hole on its Predix software platform, it’s quite easy to spend a lot of money without anything to show for it. And United Technologies will admittedly be distracted while it integrates not only Raytheon, but the $30 billion acquisition of avionics maker Rockwell Collins Inc., which only just closed in November. Not to mention it’s also trying to break itself in three parts. The company’s wager on scale is still highly untested and despite all the speculation about the sweeping consolidation its dealmaking might inspire, we haven’t seen much of that. Of the eight aerospace and defense deals larger than $5 billion over the past decade, United Technologies (or Rockwell Collins) has been involved as a buyer in four of them; United Technologies also sold its Sikorsky helicopter unit to Lockheed Martin Corp. for $9 billion in 2015. The party of bigger is better is pretty much a party of one – again, for now.Joyce interestingly said that while the United Technologies-Raytheon tie-up doesn’t make him feel compelled to act, he “wouldn’t rule out anything” when it comes to a deal with a good value proposition, and that he talks to CEO Larry Culp on a regular basis. That echoes increasingly frequent comments made by Culp about going on offense. I do wonder whether GE is thinking more seriously about dealmaking – or if it just wants investors to think that it is. As for the much-debated possible combination of GE Aviation and Honeywell Aerospace, I don’t get the impression the latter is that interested. Honeywell views acquisitions as a way to extend the capabilities of its businesses, rather than double down on more of the same, Mahoney said. He gives the example of Honeywell’s purchase of fuel-efficiency software maker Aviaso in 2015 for an undisclosed amount. Mahoney said he wished Aviaso was a larger business, which suggests he’s not opposed to bigger takeovers but only if the technology is really compelling.So don’t hold your breath on that one. But could there be other deals? Check back at next year’s Air Show in Farnborough. To contact the author of this story: Brooke Sutherland at bsutherland7@bloomberg.netTo contact the editor responsible for this story: Beth Williams at bewilliams@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brooke Sutherland is a Bloomberg Opinion columnist covering deals and industrial companies. She previously wrote an M&A column for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • Reuters2 days ago

    US says could sanction Turkish defence firms beyond F-35 suppliers

    Washington is looking at imposing financial sanctions on Turkish firms beyond those that build parts for the Lockheed Martin F-35 fighter jet, over Ankara's plans to buy a Russian air defence system, a top Pentagon official said on Monday. Chief arms buyer Ellen Lord said U.S. officials viewed Turkey as an important NATO ally and urged it to drop its plans to buy the Russian-built S-400 air defence system so that its companies could continue to build critical parts for a wide range of other U.S. weapons systems beside the F-35 fighter jet.

  • Defense Stocks to Gain If Trump Sends Troops to Middle East
    Zacks2 days ago

    Defense Stocks to Gain If Trump Sends Troops to Middle East

    The recent attacks on oil tankers rattle the international petroleum market. If U.S. initiates a war in the Middle East, U.S. defense majors are likely to gain.

  • Raytheon Wins $33M Deal to Support Dual Band Decoy Program
    Zacks2 days ago

    Raytheon Wins $33M Deal to Support Dual Band Decoy Program

    The latest contract will enable Raytheon (RTN) to conduct the DET, which expands the existing capabilities of the Integrated Defensive Electronic Countermeasures used in F/A-18E/F aircraft.

  • Lockheed: No concern that Raytheon-UTC merger will affect F-35 program
    Reuters2 days ago

    Lockheed: No concern that Raytheon-UTC merger will affect F-35 program

    Lockheed Martin F-35 program manager Greg Ulmer said on Monday he had "no concern" that the proposed merger of Raytheon Co and United Technologies Corp would affect the F-35 program or pressure its margins. "I don't see any concern," Ulmer told reporters at the Paris Airshow when asked if the merger of two key suppliers would affect the F-35 program, which is working hard to reduce costs.

  • Should Investors Worry About Defense-Industry Consolidation?
    Motley Fool3 days ago

    Should Investors Worry About Defense-Industry Consolidation?

    The government advocated mergers in years past, but that push makes it harder for companies to get deals done today like United Technologies/Raytheon.

  • Financial Times3 days ago

    Manufacturers upbeat on outlook for defence spending

    Plans announced by United Technologies and Raytheon last week to merge to form a $120bn aerospace and defence behemoth have raised questions about whether spending in the US, the world’s biggest defence market, will plateau after 2020.

  • Barrons.com4 days ago

    The United Technologies Merger With Raytheon Isn’t Great for Shareholders. But Both Stocks Are Cheap.

    United Technologies’ push to simplify is being aborted, and Raytheon isn’t getting a premium. But both stocks trade at a discount to peers.

  • Dow Jones Today: Stocks Have a No-Fun Friday
    InvestorPlace5 days ago

    Dow Jones Today: Stocks Have a No-Fun Friday

    Market participants in search of an adrenaline rush were likely left disappointed today. The major U.S. equity benchmarks meandered for most of the day, resulting in slightly lower finishes by the time the closing bell rang.Source: Shutterstock The Nasdaq Composite was the worst offender (we'll get to that in a minute), shedding 0.52% while the S&P 500 lost 0.16%. The Dow Jones Industrial Average slipped 0.07%.The tech-heavy Nasdaq was Friday's dog among the major indexes due in large part to awful guidance from semiconductor maker Broadcom Inc. (NASDAQ:AVGO). Semiconductor stocks have been one of the epicenters of the U.S./China trade war and has been noted here, that trade war is expected to have some ill effects on second-quarter results. Broadcom proves as much.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe company slashed its 2019 revenue forecast "to $22.5 billion, from $24.5 billion and lowered its outlook for capital spending to $500 million, from $550 million," according to Barron's.Shares of Broadcom slumped 5.6% today, spurring a slew of negative action by sell-side analysts. Intel (NASDAQ:INTC) is the only semiconductor maker in the Dow Jones, and its shares slid 1.1% Friday in response to the weakness in Broadcom. The Dow Jones Industrial Average is home to six technology stocks. Just two closed higher today. Slim Pickings Among WinnersThe Home Depot (NYSE:HD) was the biggest winner in the Dow today, gaining 1.7% to push its month-to-date gain to over 7%. The consumer cyclical name has been moving higher on light news this month, but there are some data points that portend some strength in the consumer, the driving force of the U.S. economy. * 10 Stocks to Buy That Wall Street Expects to Soar for the Rest of 2019 "The latest data on retail sales from the Census Bureau, released on Friday, suggests that spending is now rising to match incomes," according to Barron's. "Average spending at stores, bars, and restaurants, excluding gasoline stations, was up 1.2% in April and May, compared with February and March on a seasonally adjusted basis."Walmart (NYSE:WMT) said it is laying off around 600 workers in Charlotte as part of an outsourcing program. The company is the largest U.S. retailer and biggest non-government employer in the U.S. It is doubtful that a headcount reduction of 600 was behind today's gain of 0.4% for the stock. Shares of Walmart are up about 9% this month, serving as another example of investors' preference for defensive names. The stock hit a 52-week high today.United Technologies (NYSE:UTX), the defense giant that has been making regular appearances in this space in recent days, traded slightly higher today after an analyst said the stock's drubbing in the wake of its controversial deal with Raytheon (NYSE:RTN) is a case of too much, too fast.Today, Vertical Research analyst Jeffrey Sprague upgraded United Technologies to "buy" from "hold" while lifting his price target on the stock to $145 from $140.Goldman Sachs Group (NYSE:GS), the largest U.S. investment stock and the biggest financial stock in the Dow, rose 0.19%.The stock "is currently trading at around tangible book value, and it has over 30% upside to our fair value estimate," said Morningstar. Bottom Line on the Dow Jones TodayInvestors should expect to see more diverging data points and opinions over the near term. For example, the Federal Reserve said in a report out Friday that industrial production rose 0.4% last month. However, the University of Michigan consumer sentiment reading for June dropped to 97.9 this month from 100 in May. That was due in large part to tariff concerns.With second-quarter earnings season fast approaching, investors may want to consider looking for sector-level opportunities."At the sector level, analysts are most optimistic on the Energy (64%), Health Care (60%), and Communication Services (60%) sectors, as these three sectors have the highest percentages of Buy ratings," according to FactSet.As of this writing, Todd Shriber did not own any of the aforementioned securities. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 10 Stocks to Buy That Wall Street Expects to Soar for the Rest of 2019 * 7 Value Stocks That Are Flying Under the Radar * 6 Mouth-Watering Fast Food Stocks for Growth Investors Compare Brokers The post Dow Jones Today: Stocks Have a No-Fun Friday appeared first on InvestorPlace.

  • Bloomberg5 days ago

    Planemakers Jet Off to Paris Air Show Under Growth Clouds

    (Bloomberg Opinion) -- Aircraft manufacturers and suppliers big and small will gather at the Paris Air Show next week to showcase new products and technologies, trumpet orders (both firm, tentative and recycled) and pontificate on the industry.This year’s event comes amid concerns that the robust commercial aerospace spending cycle that has fueled record backlogs is getting long in the tooth. Passenger traffic grew 4.3% in April, which was an improvement from a notably weak 3.1% expansion in March but off the long-term average of about 5%, according to data from the International Air Transport Association. The common thinking had been that secular changes like the burgeoning middle class in emerging markets and millennials’ preference for travel experiences would support traffic growth beyond that average rate, and that was what happened for a few years. Whether or not the slackening trend of the past two months lasts, commercial air-travel demand will most likely continue to grow in some capacity, Aengus Kelly, CEO of plane-lessor AerCap Holdings NV, said in a phone interview this week. The question is whether Boeing Co. and Airbus SE are already planning to build more planes than the industry will need and whether some customers may soon realize they’ve overpaid for assets or bought plane models that now look less desirable. “We have a view on the value of an asset, so where we see value and price intersect, we will be aggressive,” Kelly said. “You can’t say I’m going to buy growth at any price. If it’s a great sellers’ market, it can’t be a great buyers’ market.”Profit margins are already showing signs of wobbling at some airlines amid higher costs and competition for fares. That, combined with a slower economic backdrop and the continued grounding of Boeing’s 737 Max jet, may keep a lid on fresh aircraft orders at the Air Show, write Bloomberg Intelligence analysts George Ferguson and Francois Duflot. American Airlines Group Inc. has pulled the Max from its schedule through Sept. 3, but CEO Doug Parker told shareholders at the company’s annual meeting this week that it’s highly likely the plane will be flying by then. That comment might mean more if the company hadn’t also said it was confident the Max would be recertified by Aug. 19, the previous estimate for returning the plane to American’s schedule. A Federal Aviation Administration official was more measured, saying the plane should be back in the air by December. Once the Max re-enters service, the impact on Boeing’s deliveries may linger for a few years, Kelly said. Boeing said this week it booked zero orders in May and delivered 30 planes,down substantially from the same period a year earlier. When asked whether the Max crisis may present an opportunity to negotiate a discount on the Max, Kelly replied “possibly” but said it’s hard to contemplate much of anything to do with the plane until regulators all across the globe deem it safe to fly again.There’s also the risk that some of Boeing’s other products get caught in the fray. Europe’s aviation regulator said this week that it would assess  commonalities between the 737 Max and the 777X jet that’s meant to enter service in 2020. Airbus, meanwhile, may unveil the A321XLR — a longer-range version of its largest-single aisle jet — at the Air Show in a bid to undercut the business case for a potential Boeing mid-market aircraft, a decision on which has likely been shelved for the time being amid the Max crisis. Airbus is also reportedly considering making the next version of its best-selling A320neo narrow-body jet a hybrid-electric model. The other hot topic at the Air Show will be the implications of the gargantuan merger United Technologies Corp. announced this week with Raytheon Co. The combined company — dubbed Raytheon Technologies Corp. — is set to have $74 billion in sales spanning missiles, commercial jet engines, airplane lavatories and avionics. That United Technologies felt the need to diversify through more exposure to the defense market doesn’t send the strongest vote of confidence that the commercial aviation boom will continue unabated. The combined company’s $8 billion R&D budget will be multiples above peers, and that has to be spooking some rivals, particularly General Electric Co., whose cash-flow challenges may keep it from responding in kind. Some analysts have pointed to Aerojet Rocketdyne Holdings Inc. as a potential next target, while others have debated tie-ups between Airbus and BAE Systems Plc or Safran SA and Thales SA. MEET MEGATRONOnly four aerospace and defense deals in the past decade have been bigger than $10 billion, and United Technologies CEO Greg Hayes has played a role in three of them. The all-stock deal with Raytheon will make United Technologies a more legitimate counterweight to Boeing and would seem to give it a better shot at protecting its margins and market share from the planemaker’s squeeze. Some criticized the deal as effectively turning United Technologies into a conglomerate again, just after it announced a three-way split that will make the Carrier building-controls and Otis elevator units stand-alone companies. I disagree; I think this deal fits perfectly within the anti-conglomerate game theory. Sprawling diversity is out, but sheer scale and focused vertical integration is in. The appeal of the deal for Raytheon is less obvious. The company seemingly has the more attractive growth and free cash flow profile, so it seems a bit odd that CEO Thomas Kennedy was the one who reached out to Hayes and then was willing to accept no premium; a minority stake in the combined entity; and the abdication of his title in favor of an executive chairman post. Maybe Raytheon felt it needed the heft of a bigger company to properly invest in priorities like hypersonics and cybersecurity. Or maybe the company was worried about being sidelined with Harris Corp. and L3 Technologies Inc. merging and Northrop Grumman Corp. and Lockheed Martin Corp. striking deals of their own over the past few years. Two people not yet on board with this transaction are President Donald Trump and activist investor Bill Ackman. Trump ruminated to CNBC about whether the deal may squelch competition for military contracts, causing shares of both companies to dip even as they insisted there’s little overlap between them and vowed to share about half of the $1 billion-plus in targeted annual cost savings with the Pentagon. Ackman, who built a stake in United Technologies last year and supported its breakup plan, wrote a letter to Hayes lambasting the use of the company’s undervalued stock as a deal currency and deeming Raytheon an “inferior” business. Those strike me as shortsighted critiques. The one thing you can say about this deal is that it’s another big undertaking when United Technologies is already juggling the $30 billion takeover of Rockwell Collins Inc. and a breakup. Execution risk is high, but if management can pull it off, this deal has the potential to be a game-changer.TARIFF ME, TARIFF ME NOTTrump’s latest tariff dance with Mexico ended up lasting only about a week. He announced late last Friday that he wouldn’t impose sweeping levies on Mexican goods after the country agreed to do more to address the flow of immigrants across its border into the U.S. The New York Times reported that most of the actions Mexico agreed to take had already been negotiated months earlier, an article that Trump took issue with on Twitter. Later this week, Trump threatened Mexico with “a much tougher phase” if it didn’t deliver a demonstrable drop in migrant traffic. Mexican Foreign Minister Marcelo Ebrard said his country has 45 days to prove it’s following through on its commitments. Those comments raise the prospect of the tariffs going into effect after all at a later date. So while manufacturers have avoided this particular trade headache for now, the uncertainty this latest spat has introduced isn’t going anywhere. On the China front, Trump said he’s personally holding up a trade deal and threatened to put tariffs on $300 billion of goods if the country’s president, Xi Jinping, doesn’t meet with him at the G-20 summit later this month. There are signs that China is girding for a protracted trade war, even with its economy on shakier ground. So the industrial pressure points continue to pile up. Macquarie analyst Sameer Rathod warned this week that Caterpillar Inc. is likely to face a serious drop-off in demand and margin erosion amid a slowdown in China excavator sales. Research firm LMC Automotive sounded the alarm on a “sustained downturn” in the global automotive industry, while Bank of America Merrill Lynch analyst John Murphy said expectations of an improvement in the Chinese market later this year are too optimistic. Of note, a report this week showed U.S. car brands were losing market share in China to German and Japanese models. The data is from the state-backed China Association of Automobile Manufacturers, so take that for what you will.DEALS, ACTIVISTS AND CORPORATE GOVERNANCERoper Technologies Inc. scrapped the sale of its Gatan electron-microscope instruments business to Thermo Fisher Scientific Inc. after running into “challenges” in getting U.K. regulatory approval for the $925 million deal. Roper management previously expressed optimism that they could overcome inquiries from the U.K.’s Competition and Markets Authority, but the asset sale was announced about a year ago, and the two sides may have just run out of hope and patience. While Roper won’t get the $700 million in net proceeds it was anticipating from the divestiture, it will still have plenty of M&A firepower. The company has said it could deploy about $7 billion over the next four years. RBC analyst Deane Dray said that Thermo Fisher was the most logical buyer for the Gatan business and that Roper may struggle to find an alternative suitor willing to pay a similarly high valuation. This underscores why it can be difficult for Roper to divest even those businesses that no longer fit with its current software-driven identity. On the flip side, Dray now estimates Roper’s 2019 earnings per share could be as much as 25 cents higher now that Gatan is likely staying in the fold.Avis Budget Group Inc. has a better shot of selling a potential merger with Hertz Global Holdings Inc. to U.S. antitrust regulators as ride-hailing services Uber Technologies Inc. and Lyft Inc. take sales away from the traditional car rental market, Macquarie analyst Hamzah Mazari argues in a report this week. Avis’s and Hertz’s market share each shrinks from the low 20% range to high single digits if Lyft and Uber are treated as commercial-travel competitors, he writes. That’s even after making a conservative assumption about the percentage of Uber and Lyft’s vehicle miles that might have otherwise gone to rental companies. That may make regulators more amenable to a deal that would create a stronger challenger to rental giant Enterprise, which itself has 56% of the U.S. car rental market excluding ride-sharing services, Mazari writes, citing conversations with antitrust lawyers. Mazari says he’s not aware of any deal talks and isn’t outright advocating for them, but he notes scale is beneficial in the car rental industry when it comes to IT systems, car procurement and pricing discipline. Ferguson Plc, a plumbing-products merchant formerly known as Wolseley, has attracted the attention of sometimes-activist investor Trian Fund Management. The fund, run by Nelson Peltz, has built a 6% stake in Ferguson and says it will push management to correct the stock’s discount to U.S. peers. That’s sparked speculation about whether Trian could seek to press the company to shift its listing to the U.S. from the U.K. Ferguson derives nearly 90% of its revenue from North America, but its position on a U.K. stock exchange may keep it out of the jurisdiction of U.S. fund managers. My Bloomberg Opinion colleague Chris Hughes points out that engineering a U.S. listing is easier said than done and that it may be oversimplifying things to blame all of Ferguson’s discount on its British address. Worries about a slowdown in the U.S. and lackluster margin improvement could also be a factor, he writes.  BONUS READINGReassessing Jack Welch’s Legacy After GE’s Decline: Joe Nocera Saving Earth With Electric Cars Means Wrecking a Fragile DesertOutback Town That Rivaled Manhattan’s Prices Now Gathers Dust Trump’s Goods-Sector Jobs Boom Has Fizzled Out: Justin FoxOil’s 2019 Weakness Has Roots in 2018’s Strength: Liam Denning VW’s $18.6 Billion Truck IPO to Test CEO’s Overhaul PlanTo contact the author of this story: Brooke Sutherland at bsutherland7@bloomberg.netTo contact the editor responsible for this story: Daniel Niemi at dniemi1@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brooke Sutherland is a Bloomberg Opinion columnist covering deals and industrial companies. She previously wrote an M&A column for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • Airbus urges UTC not to be distracted by Raytheon deal
    Reuters5 days ago

    Airbus urges UTC not to be distracted by Raytheon deal

    Airbus said on Friday it had urged United Technologies to "keep its eye on the ball" in its role as a commercial aerospace supplier as it moves towards a planned merger with U.S. defence contractor Raytheon. Chief Executive Guillaume Faury said the message was understood by the world's largest aerospace supplier, whose Pratt & Whitney unit supplies engines for the A320neo jet. Faury told a news conference he had spoken to UTC leaders and would do so again at the Paris Airshow next week.