There have been only four aerospace and defense deals valued at more than $10 billion in the last decade, and United Technologies now accounts for three of them.
Raytheon gives United Technologies cybersecurity expertise, helping to solve one of the key concerns airlines have about digitizing parts of their planes.
Both Honeywell and GE have their reasons for sitting out the mergers and acquisitions rush. After Honeywell then-Chief Executive David Cote made a failed attempt at merging with United Technologies in 2016, his successor Darius Adamczyk has preferred to focus on streamlining his company and making small, strategic software bets.
For one, United Technologies now has all the right pieces to become a clear leader in the race to develop connected aircraft. The Rockwell Collins deal gave it expertise in avionics, essentially the brains of the airplane. Raytheon will give it cybersecurity expertise, helping to solve one of the key concerns airlines have about digitizing parts of their planes.
The deal some investors still dream about is a combination of Honeywell and GE’s aviation units. Even combined, the companies would still trail the sales volume of a merged United Technologies-Raytheon, but it would go a long way toward catching them up. There are also plenty of reasons to think a Honeywell-GE aerospace merger wouldn’t happen.
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