Raytheon and United Technologies are in talks to merge in an all-stock deal, according to the Wall Street Journal.

Raytheon Missile Systems, a subsidiary of the international aerospace and defense company, is one of southern Arizona's largest employers.

The deal would not affect United's planned spinoffs of its Otis elevator and Carrier building systems operations, the Journal reported.

The companies have a combined market capitalization of $166 billion, the report said. An announcement of a deal could come in days, if talks continue.

Raytheon is headquartered in Waltham, Mass. It embarked last year on a $550 million expansion to its Tucson facilities, which included a new laboratory, missile testing and office space.

The company now has about 12,000 workers in Tucson, buoyed by a 2,000-worker expansion last year aided by a $5 million grant from the state.

According to an analysis from Arizona State University, Raytheon has an estimated $2.1 billion annual economic benefit to the state.

Based in Farmington, Conn., United Technologies shares are trading at 16.6 times estimated earnings, slightly ahead of the 16 times for Raytheon, according to Bloomberg. Both stocks have risen more than 20% this year, exceeding the 15% gain in the S&P 500 Index, it reported.

Staff writer Ryan Randazzo contributed to this report.