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Filed by Raytheon Company
Pursuant to Rule 425 under the Securities Act of 1933
And deemed filed pursuant to Rule 14a-12
Under the Securities Exchange Act of 1934
Subject Company: Raytheon Company
Commission File No.: 001-13699
Date: June 10, 2019
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From:
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Tom Kennedy
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To:
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Raytheon’s employees (all-employees list)
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Date:
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Sunday, June 9, 2019
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| Subject: |
Raytheon and United Technologies to form new company
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________________________________
Dear Raytheon colleague,
Today is an exciting day for our company and one that brings with it tremendous opportunity for our future success.
This afternoon, we announced that Raytheon will merge with United Technologies Corporation (UTC). The combined company will be
called Raytheon Technologies Corporation. This merger of equals will create a leading aerospace and defense systems supplier with a diversified technologies portfolio able to meet the growing capabilities demand from our global customer base.
UTC provides advanced technologies and services to the aerospace and defense industry that are highly complementary to our
existing business. Its Collins Aerospace and Pratt & Whitney business units have over $45 billion in annual revenue and employ about 115,000 employees at more than 400 locations in 50 countries around the world. As UTC previously announced, its
Carrier and Otis business units will be separated from the company prior to closing and will not be a part of our merger.
I will assume the role of Executive Chairman of the combined company and Greg Hayes, the current Chairman and CEO of UTC, will
serve as the CEO of the combined company, once the transaction is closed. The Board of Directors of the combined company will consist of 15 of the existing directors of Raytheon and UTC, including Greg Hayes and myself. The leadership teams of both
companies will be consolidated and combined, and announced in the coming months. We will be headquartered in the greater Boston-metro area and will maintain a corporate presence at current company locations. We expect the merger to be completed in
the first half of 2020, subject to approval of the shareholders of each company, receipt of required regulatory approvals and satisfaction of other customary closing conditions, as well as completion by UTC of the separation of its Carrier and Otis
businesses.
Upon completion of the merger, we will consolidate our four business units, consisting of Integrated Defense Systems (IDS),
Intelligence, Information and Services (IIS), Raytheon Missile Systems (RMS), Space and Airborne Systems (SAS) and Forcepoint, into two businesses. The new businesses, which will be comprised of an IDS/RMS and IIS/SAS/Forcepoint consolidation, will
be renamed Integrated Defense & Missile Systems and Intelligence, Space & Airborne Systems, respectively. They will join Collins Aerospace and Pratt & Whitney as the four primary business units of Raytheon Technologies. The combined
company is expected to be the world’s preeminent aerospace and defense systems supplier, ranking in the top 50 of the Fortune 500, with annual revenues of approximately $74 billion and over 180,000 employees worldwide.
This “merger of equals” will create new opportunities for growth across the company and aligns directly with our strategy to focus
on top-line growth and global market expansion. Once combined, Raytheon Technologies will offer some of the world’s most advanced technologies in the areas of avionics, military and commercial aircraft propulsion, integrated air and missile
defense, and space, sensor and intelligence platforms.
Until this merger is completed, I ask each of you to focus on the important work of meeting our current customer, shareholder and
community commitments. It’s vitally important that we do not let the merger distract us from fulfilling our current business commitments. A working group will be formed to manage integration activities, and new teams will be named shortly to begin
planning for business consolidation. My commitment to each of you is that we will keep you informed and updated as the transaction progresses. In addition to ongoing messaging from myself and leadership via oneRTN, you can visit the merger
microsite on Raytheon.com. Please visit these sites frequently for updates on merger activities and information.
For 97 years, Raytheon has provided mission-critical technologies to our customers, supported a diverse and engaged workforce, and
has been a good corporate citizen. That legacy, built on a foundation of trust, respect, collaboration, innovation and accountability, will continue. We are becoming a larger company, and our common vision remains the same: to create the trusted,
innovative solutions to make the world a safer place.
Respectfully,
Tom
Cautionary Statement Regarding Forward-Looking Statements
This communication contains statements which, to the extent they are not statements of historical or present fact, constitute
“forward-looking statements” under the securities laws. From time to time, oral or written forward-looking statements may also be included in other information released to the public. These forward-looking statements are intended to provide
Raytheon Company’s (“Raytheon”) and United Technologies Corporation’s (“UTC”) respective management’s current expectations or plans for our future operating and financial performance, based on assumptions currently believed to be valid.
Forward-looking statements can be identified by the use of words such as “believe,” “expect,” “expectations,” “plans,” “strategy,” “prospects,” “estimate,” “project,” “target,” “anticipate,” “will,” “should,” “see,” “guidance,” “outlook,”
“confident,” “on track” and other words of similar meaning. Forward-looking statements may include, among other things, statements relating to future sales, earnings, cash flow, results of operations, uses of cash, share repurchases, tax rates,
R&D spend, other measures of financial performance, potential future plans, strategies or transactions, credit ratings and net indebtedness, other anticipated benefits of the proposed merger or the spin-offs by UTC of Otis and Carrier into
separate independent companies (the “separation transactions”), including estimated synergies and customer cost savings resulting from the proposed merger, the expected timing of completion of the proposed merger and the separation transactions,
estimated costs associated with such transactions and other statements that are not historical facts. All forward-looking statements involve risks, uncertainties and other factors that may cause actual results to differ materially from those
expressed or implied in the forward-looking statements. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the U.S. Private Securities Litigation Reform Act of 1995. Such risks,
uncertainties and other factors include, without limitation: (1) the effect of economic conditions in the industries and markets in which UTC and Raytheon operate in the U.S. and globally and any changes therein, including financial market
conditions, fluctuations in commodity prices, interest rates and foreign currency exchange rates, levels of end market demand in construction and in both the commercial and defense segments of the aerospace industry, levels of air travel,
financial condition of commercial airlines, the impact of weather conditions and natural disasters, the financial condition of our customers and suppliers, and the risks associated with U.S. government sales (including changes or shifts in
defense spending due to budgetary constraints, spending cuts resulting from sequestration, a government shutdown, or otherwise, and uncertain funding of programs); (2) challenges in the development, production, delivery, support, performance and
realization of the anticipated benefits (including our expected returns under customer contracts) of advanced technologies and new products and services; (3) the scope, nature, impact or timing of the proposed merger and the separation
transactions and other merger, acquisition and divestiture activity, including among other things the integration of or with other businesses and realization of synergies and opportunities for growth and innovation and incurrence of related costs
and expenses; (4) future levels of indebtedness, including indebtedness that may be incurred in connection with the proposed merger and the separation transactions, and capital spending and research and development spending; (5) future
availability of credit and factors that may affect such availability, including credit market conditions and our capital structure; (6) the timing and scope of future repurchases by the companies of their respective common stock, which may be
suspended at any time due to various factors, including market conditions and the level of other investing activities and uses of cash, including in connection with the proposed merger; (7) delays and disruption in delivery of materials and
services from suppliers; (8) company and customer-directed cost reduction efforts and restructuring costs and savings and other consequences thereof (including the potential termination of U.S. government contracts and performance under
undefinitized contract awards and the potential inability to recover termination costs); (9) new business and investment opportunities; (10) the ability to realize the intended benefits of organizational changes; (11) the anticipated benefits of
diversification and balance of operations across product lines, regions and industries; (12) the outcome of legal proceedings, investigations and other contingencies; (13) pension plan assumptions and future contributions; (14) the impact of the
negotiation of collective bargaining agreements and labor disputes; (15) the effect of changes in political conditions in the U.S. and other countries in which UTC, Raytheon and the businesses of each operate, including the effect of changes in
U.S. trade policies or the U.K.’s pending withdrawal from the European Union, on general market conditions, global trade policies and currency exchange rates in the near term and beyond; (16) the effect of changes in tax (including U.S. tax
reform enacted on December 22, 2017, which is commonly referred to as the Tax Cuts and Jobs Act of 2017), environmental, regulatory and other laws and regulations (including, among other things, export and import requirements such as the
International Traffic in Arms Regulations and the Export Administration Regulations, anti-bribery and anti-corruption requirements, including the Foreign Corrupt Practices Act, industrial cooperation agreement obligations, and procurement and
other regulations) in the U.S. and other countries in which UTC, Raytheon and the businesses of each operate;
(17) negative effects of the announcement or pendency of the proposed merger or the separation transactions on the market price
of UTC’s and/or Raytheon’s respective common stock and/or on their respective financial performance; (18) the ability of the parties to receive the required regulatory approvals for the proposed merger (and the risk that such approvals may result
in the imposition of conditions that could adversely affect the combined company or the expected benefits of the transaction) and approvals of UTC’s stockholders and Raytheon’s stockholders and to satisfy the other conditions to the closing of
the merger on a timely basis or at all; (19) the occurrence of events that may give rise to a right of one or both of the parties to terminate the merger agreement; (20) risks relating to the value of the UTC shares to be issued in the proposed
merger, significant transaction costs and/or unknown liabilities; (21) the possibility that the anticipated benefits from the proposed merger cannot be realized in full or at all or may take longer to realize than expected, including risks
associated with third party contracts containing consent and/or other provisions that may be triggered by the proposed transaction; (22) risks associated with transaction-related litigation; (23) the possibility that costs or difficulties related
to the integration of UTC’s and Raytheon’s operations will be greater than expected; (24) risks relating to completed merger, acquisition and divestiture activity, including UTC’s integration of Rockwell Collins, including the risk that the
integration may be more difficult, time-consuming or costly than expected or may not result in the achievement of estimated synergies within the contemplated time frame or at all; (25) the ability of each of Raytheon, UTC, the companies resulting
from the separation transactions and the combined company to retain and hire key personnel; (26) the expected benefits and timing of the separation transactions, and the risk that conditions to the separation transactions will not be satisfied
and/or that the separation transactions will not be completed within the expected time frame, on the expected terms or at all; (27) the intended qualification of (i) the merger as a tax-free reorganization and (ii) the separation transactions as
tax-free to UTC and UTC’s stockholders, in each case, for U.S. federal income tax purposes; (28) the possibility that any opinions, consents, approvals or rulings required in connection with the separation transactions will not be received or
obtained within the expected time frame, on the expected terms or at all; (29) expected financing transactions undertaken in connection with the proposed merger and the separation transactions and risks associated with additional indebtedness;
(30) the risk that dissynergy costs, costs of restructuring transactions and other costs incurred in connection with the separation transactions will exceed UTC’s estimates; and (31) the impact of the proposed merger and the separation
transactions on the respective businesses of Raytheon and UTC and the risk that the separation transactions may be more difficult, time-consuming or costly than expected, including the impact on UTC’s resources, systems, procedures and controls,
diversion of its management’s attention and the impact on relationships with customers, suppliers, employees and other business counterparties. There can be no assurance that the proposed merger, the separation transactions or any other
transaction described above will in fact be consummated in the manner described or at all. For additional information on identifying factors that may cause actual results to vary materially from those stated in forward-looking statements, see the
reports of UTC and Raytheon on Forms 10-K, 10-Q and 8-K filed with or furnished to the Securities and Exchange Commission (the “SEC”) from time to time. Any forward-looking statement speaks only as of the date on which it is made, and UTC and
Raytheon assume no obligation to update or revise such statement, whether as a result of new information, future events or otherwise, except as required by applicable law.
Additional Information and Where to Find It
In connection with the proposed merger, UTC will file a registration statement on Form S-4, which will include a document that
serves as a prospectus of UTC and a joint proxy statement of UTC and Raytheon (the “joint proxy statement/prospectus”), and each party will file other documents regarding the proposed merger with the SEC. In addition, in connection with the
separation transactions, subsidiaries of UTC will file registration statements on Form 10 or S-1. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC WHEN THEY
BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. A definitive joint proxy statement/prospectus will be sent to UTC’s stockholders and Raytheon’s stockholders. Investors and security holders will be able to obtain the
registration statements and the joint proxy statement/prospectus free of charge from the SEC’s website or from UTC or Raytheon. The documents filed by UTC with the SEC may be obtained free of charge at UTC’s website at www.utc.com or at the SEC’s
website at www.sec.gov. These documents may also be obtained free of charge from UTC by requesting them by mail at UTC Corporate Secretary, 10 Farm Springs Road, Farmington, CT, 06032, by telephone at 1-860-728-7870 or by email at
corpsec@corphq.utc.com. The documents filed by Raytheon with the SEC may be obtained free of charge at Raytheon’s website at www.raytheon.com or at the SEC’s website at www.sec.gov. These documents may also be obtained free of charge from
Raytheon by requesting them by mail at Raytheon Company, Investor Relations, 870 Winter Street, Waltham, MA, 02541, by telephone at 1-781-522-5123 or by email at invest@raytheon.com.
Participants in the Solicitation
Raytheon and UTC and their respective directors and executive officers and other members of management and employees may be
deemed to be participants in the solicitation of proxies in respect of the proposed merger. Information about Raytheon’s directors and executive officers is available in Raytheon’s proxy statement dated April 16, 2019, for its 2019 Annual Meeting
of Shareholders. Information about UTC’s directors and executive officers is available in UTC’s proxy statement dated March 18, 2019, for its 2019 Annual Meeting of Shareowners. Other information regarding the participants in the proxy
solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the joint proxy statement/prospectus and other relevant materials to be filed with the SEC regarding the transaction
when they become available. Investors should read the joint proxy statement/prospectus carefully when it becomes available before making any voting or investment decisions. You may obtain free copies of these documents from Raytheon or UTC as
indicated above.
No Offer or Solicitation
This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there
be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by
means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended.