Adam Jeffery | CNBC
Activist investor Bill Ackman is urging United Technologies to abandon its $100 billion stock merger with Raytheon, a source familiar with the matter confirmed to CNBC.
Ackman, whose Pershing Square Capital Management owned 5.8 million United Technologies shares at the end of the first quarter, said in a letter that the tie-up is ill-advised. Ackman had previously encouraged United Technologies to streamline its business by splitting up parts of the conglomerate.
The fund manager sent a letter to United CEO Greg Hayes on Sunday morning following a report that the company was in merger talks with Raytheon, the source confirmed to CNBC. Pershing Square declined to comment on the letter.
The Wall Street Journal first reported Ackmans opposition.
Shares of both companies were little changed in after-hours trade Tuesday.
On Sunday, Raytheon and United Technologies announced they would merge in an all-stock deal to create a new company they plan to call Raytheon Technologies. The companies have combined sales of $74 billion annually. That would make the new company the second-largest aerospace and defense company in the U.S. by revenue, behind Boeing.
"By joining forces, we will have unsurpassed technology and expanded R&D capabilities that will allow us to invest through business cycles and address our customers highest priorities," Hayes, who is set to become CEO of the combined company, said in the announcement.
— CNBCs Leslie Josephs and Christine Wang contributed to this report.