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United Technologies & Raytheon Get Final Approval for Merger

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United Technologies Corporation and Raytheon Company confirmed that they received all the regulatory nods required for closing their previously announced merger. The companies expect the merger to close before the opening of the trading session on the New York Stock Exchange (“NYSE”) on Apr 3, 2020.

It is worth mentioning here that the spin-off distribution for United Technologies' Carrier and Otis business units will be effective on the same day, just before the closing of the merger. As noted, for each of its shares, United Technologies will distribute one common share of Carrier and a half common share of Otis to shareholders of record as of Mar 19, 2020. Following the spin-off, Carrier will use the ticker symbol "CARR", while Otis will have the ticker symbol "OTIS" for trading on the NYSE.

The closing of the all-stock merger of equals, as it has been termed by the companies, will result in the creation of an aerospace and defense giant — Raytheon Technologies Corporation, headquartered in Waltham, MA. The new company will likely commence trading on the NYSE under the ticker symbol "RTX", with effect from Apr 3, 2020.

Notably, Raytheon Technologies will consolidate United Technologies’ aerospace business (comprising Collins Aerospace Systems, and Pratt & Whitney businesses) with Raytheon. Upon the closing of the deal, each share of Raytheon can be exchanged for 2.3348 shares of the new company.

Zacks Rank, Price Performance and Estimate Trend

United Technologies, with an $85.3-billion market capitalization, currently carries a Zacks Rank #4 (Sell).

In the past three months, the company’s share price has decreased 34.3%, wider than the industry’s decline of 26%.

 


 

In the past 60 days, the Zacks Consensus Estimate for its earnings has been lowered by 5.9% to $7.88 for 2020 and by 8% to $8.65 for 2021.

Stocks to Consider

A couple of better-ranked stocks are Tennant Company (TNC - Free Report) , and Griffon Corporation (GFF - Free Report) . While Tennant currently sports a Zacks Rank #1 (Strong Buy), Griffon carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Tennant delivered a positive earnings surprise of 26.60%, on average, in the trailing four quarters.

Griffon delivered a positive earnings surprise of 20.34%, on average, in the trailing four quarters.

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