"The transaction will create a premier systems provider with advanced technologies to address rapidly growing segments within aerospace and defense", the companies said in a joint statement, adding that the new enterprise is expected to have around $74 billion in sales this year.
For Raytheon, the agreement provides exposure to the commercial aerospace sector through the United Technologies' unit, which produces everything from high-value jet engines competing with GE, to cockpit controls, airplane seats and cabin interiors.
United Technologies, in turn, would gain footing in the cyber-security and defence industries, according to an earlier CNBC report.
The new company, which they are planning to call Raytheon Technologies, will have its headquarters in the Boston metropolitan area.
United Technologies Chairman and CEO Greg Hayes said "The combination of United Technologies and Raytheon will define the future of aerospace and defence [...] Our two companies have iconic brands that share a long history of innovation, customer focus and proven execution. By joining forces, we will have unsurpassed technology and expanded R&D capabilities that will allow us to invest through business cycles and address our customers' highest priorities. Merging our portfolios will also deliver cost and revenue synergies that will create long-term value for our customers and shareowners".
The deal is expected to close in the first half of 2020, the companies said in a joint statement. The merger reportedly qualifies as a tax-free reorganization for US federal income tax purposes.
Raytheon is best known for its Patriot air defence systems and its Tomahawk cruise missiles. United Technologies is a major player in the aeronautics industry with its Pratt and Whitney engines, used in civil and military planes, including the F-35 multi-role stealth fighter jet.