United Technologies and defense contractor Raytheon have agreed a $121bn merger that will create the world’s second-largest defense contractor.

The new company, to be called Raytheon Technologies, which will make Tomahawk missiles, the F-35 fighter jet engine and space suits for astronauts among other items, would have sales of about $74bn in 2019. It will be the second largest defense contractor behind Boeing and ahead of Lockheed Martin.

The merger, the largest of the year so far, will have to be approved by competition authorities and was questioned by Donald Trump on Monday. Trump told CNBC that he was a “little concerned” about the deal and that while he would like to see it go through he added: “I want to see that we don’t hurt our competition.”

Trump said aerospace companies had “all merged in so it’s hard to negotiate” with them and suggested the defense industry could be heading in the same direction.

UTC and Raytheon do not compete directly in many markets and the deal may not attract significant scrutiny. The companies expect approval by 2020. “I think from a regulatory standpoint, the beauty of this deal is there’s very little overlap … But really less than 10 jurisdictions have to approve this. We don’t have to go to China. We truly believe that we’re going to get this done relatively quickly,” Gregory Hayes, chairman and chief executive officer of United Technologies, said in a call with analysts.

There have been a series of mergers in the defense contracting sector in recent years, driven by modest growth in US spending. Companies have argued that they need greater scale to compete and spend on research and technology.

United Technologies’ aerospace business makes engines for Airbus as well as the F-35, which was developed by Lockheed Martin and is the most expensive military project in history. Last year United announced it was spinning off its escalator and air-conditioner businesses, which included the Otis elevator brand and Carrier air conditioners.

Raytheon makes missile defense and radar systems, including the Patriot missiles and other military technology used by militaries around the world.

Together the two companies employ about 180,000 people worldwide. United technologies said the merger would lead to $1bn in cost savings.

“The combination of United Technologies and Raytheon will define the future of aerospace and defense,” said Hayes. “Our two companies have iconic brands that share a long history of innovation, customer focus and proven execution. 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.”

This article has been amended to clarify that United Technologies makes the F-35 fighter jet engine.