Defense contractors United Technologies and Raytheon are reportedly in advanced calls to merge

Defense Officer Raytheon is reportedly in advanced talks to merge with United Technologies, according to a report in The Wall Street Journal . The deal could be announced as early as Monday.

Later last year, WSJ reported that United Technologies had plans to split into three separate companies by 2020, and sell off Otis Elevators and Carrier divisions to create focus in specific industries. These recent merger negotiations will not affect these plans, and the paper says the new company would be worth more than $ 100 billion, the other only for Boeing.

Raytheon is a large US defense contractor that produces a variety of military products ̵[ads1]1; aircraft and satellite communications and sensor systems, missile defenses, semiconductors, and more. United Technologies also produces a wide range of products, from elevators and air conditioners (at least through 2020), as well as military aircraft engines (for F-15 and F-35 fighters) and civilians (for Airbus and Gulfstream). Last year, United Technologies bought aviation and defense contractor Rockwell Collins for $ 30 billion.

If the deal goes through, it will bring together two companies that have great experience – but with little overlap with each other – in the defense industry, and will benefit from sharing technology. The increased size of the company may contribute to the downswing in the industry – WSJ says analysts predict the Pentagon is likely to reduce the purchase of new aircraft, missiles and other technologies, at least for the next couple of years.