The proposed mega-deal between United Technologies Corporation (UTC)
According to the DOJ, Raytheon and UTC are the only suppliers of military airborne radios and military GPS systems for air and sea that the Department of Defense uses. The companies also are among the few that make components for some military satellites that warn of missile launches.
The DOJ's conditions included the divestment of Raytheon's military airborne radios business. UTC must also divest from its military global positioning systems and large space-based optical systems business.
"Today's settlement protects the American taxpayer by preserving competition that leads to lower costs and higher innovation in critical military and defense products. The merger, as originally proposed, would have eliminated competition in the supply of military airborne radios and military GPS systems," said Assistant Attorney General Makan Delrahim, a member of the Antitrust Division.
In June, UTC agreed to merge its aerospace business with Raytheon, a U.S. contractor, to create a new entity worth roughly $128 billion. This would be the largest merger ever in the aerospace industry.
The deal won approval from the European Union in early March. This approval by the European Commission also included conditions.
According to the Commission, "the proposed remedies remove the entire horizontal overlap between UTC and Raytheon in both military GPS receivers and military airborne radios globally."
UTC has plans to sell off some of its assets. The UTC division Collins Aerospace's Military Global Positioning System based in Cedar Rapids, Iowa is to be purchased for $1.92 billion in cash by BAE Systems PLC
BAE also has plans to purchase Indiana-based Airborne Tactical Radios, a division of Raytheon, for $275 million. This sale is a part of the DOJ's conditions, as well, and they have approved the purchase.
Other requirements put in place by the Commission included the spinoff of UTC's Carrier and Otis divisions. These spinoffs are scheduled to occur on April 3.