NEW YORK (TheStreet) -- United Technologies (UTX) - Get Report stock surged yesterday on reports that the company is discussing a potential merger with technology and aerospace company Honeywell (HON), but shares are down today as United Technologies CEO Gregory Hayes denies that a deal will happen.
The combination of both United Technologies and Honeywell could "suddenly have muscle against Airbus (EADSY) and Boeing (BA)," TheStreet's Jim Cramer said on CNBC's Squawk on the Street. "I like that a lot."
Regardless of the combined company's potential, a merger simply "ain't gonna happen," Hayes said in an interview on Squawk on the Street this morning.
Hayes claimed that a merger that would create an industrial behemoth with nearly $100 billion in sales will not be approved in the current regulatory environment.
As Cramer mentions in the above video, the deal is most likely dead because Hayes essentially gave antitrust regulators their case to block the deal.
Even so, Cramer was struck by the definitive nature in which Hayes refused to even consider what assets United Technologies might be able to divest to gain regulatory approval.
Hayes is convinced that customers wouldn't consent to the deal, but Cramer mentioned that customers didn't consent to the proposed merger between Halliburton (HAL) and Baker Hughes (BHI) either.
"None of the customers wanted that deal to happen, but they said nothing because they realized it was business," he said.
However, Cramer did concede that Honeywell CEO Dave Cote seemed to be capitalizing on the opportunity to reach a deal before United Technologies's PurePower Geared Turbofan kicks in, climate restructuring takes place, and the positive contracts for Otis elevators happens.
United Technologies could have an earnings breakout during 2017, Cramer noted.
"One thing that has happened is [Hayes] has done a remarkable job rationalizing an irrational outfit," he continued.
Hayes is "on the verge of taking some really hard medicine" to improve the company's numbers, Cramer contended. "Cote says, wow before this stock goes back to $108, I'm gonna take it at $108." Honeywell had offered $108 per share for United Technologies.
Separately, TheStreet Ratings team rates the stock as a "hold" with a ratings score of C.
United Technologies' strengths such as its compelling growth in net income, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures are countered by weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and feeble growth in the company's earnings per share.
You can view the full analysis from the report here: UTX
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.