Updated with comments from officials on June 10, 2019, at 9:21 a.m. ET.

WASHINGTON — Raytheon and United Technologies Corporation will officially merge into a new entity called Raytheon Technologies Corporation, with the deal taking place in first half of 2020.

Following Saturday reports that a merger was imminent, the two firms made the news official Sunday, launching a website about the planned all-stock deal. On Monday, Raytheon CEO Thomas Kennedy and UTC CEO Greg Hayes held a conference call, where the two revealed that discussions about a potential merger started in summer 2018, before taking off in earnest this January.

“It’s like a mirror,” Kennedy said of UTC, noting both companies invest heavily in new technologies while remaining “platform agnostic.” Hayes added that there is roughly a one percent overlap between the two firms portfolios.

The new company will be roughly 50-50 defense and commercial, with plans to spend $8 billion on R&D after combining. Much of that funding will go towards high-end defense programs, including, per a news release, “hypersonics and future missile systems; directed energy weapons; intelligence, surveillance, and reconnaissance (ISR) in contested environments; cyber protection for connected aircraft; next generation connected airspace; and advanced analytics and artificial intelligence for commercial aviation.”

The new firm has a “tremendous opportunity to invest” in the future, Hayes said. “The resources of the combined company will allow us to do things on a stand alone basis that would have been very difficult” individually.

Hayes also expressed his belief the Pentagon would not see major issues, given the limited overlap. However, other trouble may be brewing; during a Monday interview with CNBC, U.S. President Donald Trump expressed concern about the agreement.

While being billed as a “merger of equals,” UTC shareowners will own approximately 57 percent and Raytheon shareowners will own approximately 43 percent of the combined company.

A spokesperson for Raytheon confirmed to Defense News Sunday that the combined company will be based in the greater Boston area. Raytheon is based in the Boston suburb of Waltham, while UTC is based in Farmington, Conn.

Per a news release, the new company will have approximately $74 billion in pro forma 2019 sales. The release also highlights that the merged company will be a major player in both the defense and commercial aerospace markets, giving greater market resiliency.

Byron Callan, a defense analyst with Capital Alpha Partners, wrote Sunday in a note to investors that the merger may be a sign of market trends to come.

“An RTN-UTX deal may be a signal (a siren?) that 1) this U.S. defense cycle is peaking, and firms need to start repositioning for growth in 2021 and beyond; 2) Maybe the commercial aerospace outlook is looking wobbly too and Western firms need to hedge against fallout from a U.S.-China trade split. A U.S. recession is overdue; 3) Defense firms will need to fund more of their own R&D in the future so joining a larger firm will limit margin pressure which could be evidenced in the 2020s,” Callan wrote.

Callan also sees “some overlap in the defense portfolios” for the two companies, primarily through the Mission Systems segment of Collins Aerospace. That could require some small divestitures down the road as the deal is finalized, but there do not appear to be any major issues that would lead to objections from the Pentagon.

“Both are active in defense communications, though Collins has a larger share. Both have imaging/IR products, though Raytheon has a larger product offering,” he wrote. “Collins provides large space imaging mirrors used in surveillance satellites but it’s not clear to us if there is an overlap with Raytheon’s classified space payload work.”

The deal should create a mammoth defense contractor second only to Lockheed Martin. Raytheon already ranked number two on the most recent Defense News Top 100 list, with $23.5 billion in defense revenues, 93 percent of its overall revenue total; UTC has $7.83 billion in defense revenues, a mere 13 percent of its overall figures.

However, that UTC number came before its acquisition of Rockwell Collins and its $2.28 billion in defense revenues, which will naturally increase United’s overall number.

The move comes after 18 months of major defense consolidation. In addition to UTC’s move on Rockwell, there was the General Dynamics acquisition of CSRA, Northrop Grumman’s acquisition of Orbital ATK, and L3 and Harris announcing in Oct. 2018 that they would combine to form what at the time appeared to be the seventh largest global defense firm.