Third Point Says It Opposes United Technologies-Raytheon Merger
June 28 2019 - 10:54AM
Dow Jones News
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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