Raytheon-United Technologies merger would create influential defense giant
The proposed merger between Raytheon and United Technologies could result in a defense manufacturing giant topped only by Boeing, but the combined lobbying and campaign finance operation of the potential $74 billion company could be a powerful force in Washington as well.
Between Raytheon and United Technologies, the two gave a combined $3.6 million to candidates in the 2018 cycle. The two companies’ 2018 contributions were split 54 percent to Republicans and 46 percent to Democrats.
Among fellow defense industry giants, Raytheon and United Technologies ranked fifth and sixth in 2018 contributions, giving with $2.4 million and $1.2 million respectively. The current top three include Northrop Grumman ($4.3 million), Boeing Co ($3.8 million), and Lockheed Martin ($3.5 million). There’s a relatively a large gap to get to No. 4 , General Dynamics, which contributed $2.4 million in the 2018 cycle.
Defense industry PACs typically contribute to lawmakers with certain committee assignments and geographic proximity to the company. Rep. John Larson (D-Conn.) represents the district currently home to United Technologies. The company and its affiliates comprised his second highest donor group over the last three election cycles. Larson is chairman of the Social Security subcommittee of the House Ways & Means Committee.
Rep. Richard Neal (D-Mass.), chair of the House Ways & Means Committee, receives hefty contributions from both Raytheon and United Technologies. His district is home to many of United Technologies’ workers. The company and its affiliates contributed $10,000 to his campaigns in each of the last three election cycles. Massachusetts-based Raytheon also gave the same amount over that time except for 2018 when it was evident Democrats would retake control of the House and Neal would chair a powerful committee. In 2018, Raytheon and its affiliates increased its contributions to Neal to $36,650.
Lobbying by the defense sector was a $126 million industry in 2018, with more than 770 lobbyists courting lawmakers. Last year, United Technologies spent $10.2 million on lobbying while Raytheon spent less than half that amount at $4.6 million. A whopping 95 percent of United Technologies’ lobbyists in the first quarter of 2019 were members of the revolving door.
If the merged firm retained the same lobbying profile, the combined $14.7 million force would account for 12 percent of the defense sector and 15 percent of its lobbyists. That would bring it into range to be one of the top 20 lobbying spenders alongside other major corporations such as Northrop Grumman ($14.4 million), Boeing ($15.1 million), Facebook Inc ($12.6 million), and Amazon.com ($14.4 million).
The planned merger is set to take place over the next year, but antitrust regulators must sign off first. While most analysts don’t believe it’s likely to get held up, President Trump left the door open when asked about the merger on CNBC Monday morning.
“When I hear they’re merging, does that take away more competition? It becomes one big, fat, beautiful company,” Trump said. “But I have to negotiate, meaning the United States has to buy things.”
While interest groups and corporations — particularly those aiming to get a merger approved — have increasingly hired Trump-tied firms, Raytheon and United Technologies have so far only hired one firm with White House connections.
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