On Sunday, United Technologies and Raytheon announced they were merging, shaking up the aerospace and defense industry.

Here’s what is being said about the deal:

President Trump:I’m a little concerned about United Technologies and Raytheon.”

Research Analyst with Baird Senior Peter Arment:

“I think ultimately once the administration learns on the merits of the combination that there are not any overlaps that they’re going to have a very powerful R&D capability to invest in a lot of their own technologies that the Department of Defense and there will be a beneficiary of so I think those anxieties will subside over time”

CNBC

Defense Analyst with the Lexington Institute Loren Thompson:

“Everybody knew [UTC CEO] Greg Hayes was reorganizing United Technologies to focus on aerospace and defense, but nobody anticipated a combination of this scale.”

Forbes

US Senator Richard Blumenthal (D-CT):

“As a member of the Senate Armed Services Committee, I am troubled by the possible impact on cost and competition of defense product, which may significantly affect American taxpayers,” Blumenthal said. “Of paramount interest to me is that the company match increasing defense and commercial contract commitments with additional jobs in Connecticut. I will be fighting to protect Connecticut jobs and workers every step of the way.”

The Hartford Courant

Defense analyst with Capital Alpha Partners Byron Callan:

“An RTN-UTX deal may be a signal (a siren?) that 1) this U.S. defense cycle is peaking, and firms need to start repositioning for growth in 2021 and beyond; 2) Maybe the commercial aerospace outlook is looking wobbly too and Western firms need to hedge against fallout from a U.S.-China trade split. A U.S. recession is overdue; 3) Defense firms will need to fund more of their own R&D in the future so joining a larger firm will limit margin pressure which could be evidenced in the 2020s,” Callan wrote.

Callan also sees “some overlap in the defense portfolios” for the two companies, primarily through the Mission Systems segment of Collins Aerospace. That could require some small divestitures down the road as the deal is finalized, but there do not appear to be any major issues that would lead to objections from the Pentagon.

“Both are active in defense communications, though Collins has a larger share. Both have imaging/IR products, though Raytheon has a larger product offering,” he wrote. “Collins provides large space imaging mirrors used in surveillance satellites but it’s not clear to us if there is an overlap with Raytheon’s classified space payload work.”

Defense News

Brooke Sutherland Industrials and M&A Columnist for Bloomberg:

“The Raytheon deal – which is set to be completed next year, after the spinoffs – will let United Technologies get the benefits of that breakup without sacrificing any of its size. …

The proposed merger will also put United Technologies aerospace assets on nearly equal footing with Boeing in terms of breadth and negotiating leverage. … I wrote last month about how the Max crisis has raised uncomfortable questions about how much control Boeing has already over the aerospace market and whether those questions could shift the balance of power back in favor of suppliers. I wasn’t expecting the pendulum to swing quite this quickly, but the United Technologies-Raytheon merger will certainly have that effect.”

Bloomberg

J.P. Morgan analyst Seth Seifman:

“The RTN-UTX merger is a surprise but we see real rationales on both sides in scale, diversification in the face of cyclical uncertainty, and financial benefits. UTX also gets to de-lever with Raytheon’s balance sheet and Raytheon holders get compensated in return.”

Reuters

Independent Stock Broker Bowman Gray IV:

“While this proposed deal may have potential shareholder benefits, my intuition tells me that it will either be blocked by the U.S. Justice Department,” Gray said. “Or, if allowed to move forward, they will be forced to spin off or sell several divisions.”

The Winston-Salem Journal

U.S. Rep. Joe Courtney (D-CT):

Courtney said he expects UTC’s manufacturing facilities to remain a robust presence in Connecticut.

The Hartford Courant

Gov. Ned Lamont (CT):

“I’ve spoken directly with [UTC Chairman and CEO] Greg Hayes and made it clear that Connecticut will always be open should things change, as they often do,” Lamont said. “This serves as reminder that we live in an increasingly competitive economy, domestically and internationally. As such, it’s critical we invest in education, workforce development, and our transportation infrastructure to stay competitive.”

Connecticut News Junkie

Connecticut GOP:

William Ackman’s activist hedge fund Pershing Square Capital Management LP

William Ackman’s activist hedge fund Pershing Square Capital Management LP is opposed to the merger, a person familiar with the matter said on Tuesday. Pershing Square wrote to UTC’s board to express its concerns about the deal, the source said. The hedge fund argued that the merger would distract from the company’s strategy of being nimble and focused, the source added.

CNBC