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Home / Business / Delta CEO urges UTC to stay focused after announcing the Raytheon deal

Delta CEO urges UTC to stay focused after announcing the Raytheon deal



Delta Air Lines CEO Ed Bastian said his company had a message for United Technologies after announcing its merger with Raytheon: "Stay focused."

"UTC is a great partner of ours, a great supplier of ours." Bastian said in an interview with Carl Quintanilla of CNBC. "They went through some mergers, there were some distractions along the way."

Bastian's comments come when some investors and activists opposed the proposed deal.

Raytheon and United Technologies announced Sunday that they would merge An all-stock deal that creates a company with annual revenues of $ 74 billion. When the merger is completed, it will be renamed Raytheon Technologies.

United Technologies owns aerospace manufacturer Pratt & Whitney, which produces engines for many Delta aircraft. Delta jets also have a number of products on board made by Collins Aerospace, another subsidiary of United Technologies.

In the event of a contract, United Technologies shareholders will own 57% of the new company's stock, while Raytheon investors would own 43% on a diluted basis.

However, some activists are calling on United Technologies to rethink the merger.

Bill Ackman, a billionaire, sent a letter to Greg Hayes, CEO of United Technologies, in which he asked the company to rethink its deal with Raytheon, a source CNBC said. Ackman, whose hedge fund Pershing Square Capital Management owned 5.8 million United Technologies shares at the end of the first quarter, expressed concern over the deal.

"We are extremely concerned that such a deal will significantly affect pro's business quality ̵

1; to make matters worse, the aerospace business of forma United Technologies is being driven by the highly dilutive high volume emissions of United Technologies." Shares are reached, "it says in the email from Ackman, according to Reuters.

Ackman, who advocated the rationalization of the company, supported United Technologies' plan to divide itself into three companies by spinning off Carrier and Otis.

The investor was reportedly told that Pershing Square "can not understand why United Technologies would now merge with Raytheon if United Technologies' shares are likely to be higher next year after the business split takes effect.

In a statement to CNBC, United Technologies said: "We are cheats We believe that our shareholders will recognize the merits of this transaction and the value it brings to them and the company, and we will be in the coming days and weeks work diligently to ensure that the details of the transaction are presented to and fully understood by all shareholders. "

Bastian said the proposed merger is" big "and Delta has a" close dialogue "with Hayes and his company to ensure that the other avionics suppliers of Pratt & Whitney and United Technologies continue to be in focus.

– CNBC Leslie Joseph's Thomas Franck and Leslie Picker contributed to this report.


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