By CBJ News Staff
A lawsuit and settlement agreement filed Thursday by the U.S. Department of Justice will allow the merger of Collins Aerospace parent United Technologies Corp. and Raytheon to go forward, if they divest three business units.
The settlement agreement requires that the military GPS business of Collins Aerospace located in the Corridor be sold, along with Raytheon’s military airborne radios business located in Indiana and Florida, and business units involved in production of large space-based optical systems at both companies.
A deal to sell Collins’ GPS and military airborne radios businesses to BAE Systems was previously announced in January.
“Today’s settlement protects the American taxpayer by preserving competition that leads to lower costs and higher innovation in critical military and defense products,” Assistant U.S. Attorney General Makan Delrahim said in a news release. “The merger, as originally proposed, would have eliminated competition in the supply of military airborne radios and military GPS systems, and would have positioned the merged firm to harm rivals capable of making key components for reconnaissance satellites.”
While the buyer has already been identified for the GPS and military airborne radios business, no buyer has yet been identified for the space optical systems business, including a UTC facility in Hartford, Connecticut.
The Department of Justice complaint said UTC and Raytheon are among the few firms capable of making several components for space-based electro-optical/infrared reconnaissance satellites, which provide the Department of Defense and the U.S. intelligence community with essential information such as early warning of missile launches. UTC is one of only two companies able to build large space-based optical systems, and Raytheon is the only firm that produces focal plane arrays that detect infrared light.
The European Union announced its approval of the deal on March 13, requiring the sale of the military GPS and the defense airborne radio businesses, but not the large space-based optical businesses.
The merger of equals is expected to close in early April. CBJ