United Technologies Corp. doubled down on the aerospace market with an all-stock deal to merge with defense contractor Raytheon Co. , after UTC executives earlier chose to exit the escalator and air-conditioner businesses.

The combined company, valued at more than $100 billion after planned spinoffs, would be the world’s second-largest aerospace-and-defense company by sales behind Boeing Co. , with annual revenue of about $74 billion this year. It will make everything from engines and seats for jetliners and F-35 jet fighters, to Patriot missile launchers and space suits for astronauts.

The proposed deal intensifies the consolidation in the aerospace-and-defense industry as plane makers seek better terms from suppliers and the Pentagon puts more pressure on contractors to cut costs and invest more of their own money in new technologies, such as space systems and cybersecurity.

The new company will be named Raytheon Technologies Corp., and executives on Sunday called the deal, which doesn’t include a takeover premium, a merger of equals. UTC shareholders will own 57% of the shares and UTC will appoint eight of the 15 new directors. The Wall Street Journal reported Saturday that the two sides were nearing a deal.

UTC’s current leader, Greg Hayes, will serve as CEO of the merged company, with Raytheon CEO Tom Kennedy as executive chairman for two years. Executives said the merger would allow them to boost research spending and squeeze out some $1 billion in annual costs from the marriage.