The impact of Merger of Equals on the financial performance: Raytheon and United Technologies companies as a model – Event Study –

Abstract

The first objective of this study is to investigate whether the merger of equals between Raytheon and United Technologies companies creates value for shareholders or destroys this value, while the second objective is to estimate the financial performance before and after the merger to determine the changes that occurred in the financial position, and to achieve this objectives the event study methodology was used, after that a financial analysis was conducted from 2018 to 2022.

     The study concluded that merger of equals destroyed the value, in addition to a decline in financial indicators in the first year after the merger, accompanied by a relative recovery in the second year.