The Defense Department does not currently see any issues with the recently announced merger of Raytheon [RTN] and United Technologies Corp. [UTX], the undersecretary for acquisition and sustainment said Aug. 26.

The two companies announced in June plans to consolidate Raytheon with UTC’s aerospace sector to create a $73.6 billion defense aerospace business by early next year (Defense Daily, June 9). Combined, the proposed Raytheon Technologies would become the second largest U.S. defense and aerospace firm behind Boeing [BA].

Under Secretary of Defense for Acquisition and Sustainment Ellen M. Lord holds a press briefing to update media on acquisition, reform and innovation, at the Pentagon, Washington, D.C., Aug. 26, 2019. (DoD photo by U.S. Navy Petty Officer 2nd Class James K. Lee)

Since then, lawmakers have expressed concerns about how such a move would affect the overall trend of defense industry consolidation, with senior-level defense officials including Deputy Defense Secretary David Norquist pledging to scrutinize the proposal (Defense Daily, July 24).

Lord told reporters in a briefing Monday at the Pentagon that the department is going through procedures to analyze the merger.

“There’s a process that we go through with these mergers and acquisitions. … When we get a call or we hear in the media that a merger acquisition is taking place, we go out with a request to all the components of services about what business they have with each of the two companies and whether they see any problems with limiting competition where there’s just two of them.”

The Defense Department then partners with either the Department of Justice or the Federal Trade Commission to consider any issues. But for now, regarding the Raytheon-UTC merger, “There are no major concerns that I know of right now,” Lord said.

The former president and CEO of Textron Systems Corp. – a subsidiary of Textron Inc. [TXT] – said she considered the mechanism for considering a merger “a little murky on our side” when she first joined the Defense Department in 2017, and has since worked to improve the process.