News

DATE=1/16/97
TYPE=CORRESPONDENT REPORT
NUMBER=2-208833
TITLE=RAYTHEON/HUGHES MERGER (S-ONLY)
BYLINE=NICK SIMEONE
DATELINE=WASHINGTON

INTRO: THERE HAS BEEN ANOTHER MERGER OF TWO HUGE AMERICAN DEFENSE CONTRACTORS. THE RAYTHEON COMPANY HAS AGREED TO BUY HUGHES AIRCRAFT FROM GENERAL MOTORS IN A DEAL WORTH MORE THAN NINE BILLION DOLLARS. THE MOVE IS ANOTHER STEP TOWARD THE RAPID CONSOLIDATION OF THE U-S DEFENSE INDUSTRY, A TREND THAT BEGAN WITH THE END OF THE COLD WAR. DETAILS FROM V-O-A'S CORRESPONDENT NICK SIMEONE.

TEXT: RAYTHEON'S CHAIRMAN CALLED THE MERGER THE CREATION OF ANOTHER DEFENSE ELECTRONICS POWERHOUSE AND INDEED IT IS. THE NEW COMPANY IS EXPECTED TO HAVE SALES OF 21 BILLION DOLLARS A YEAR, MAKING IT THE THIRD LARGEST AEROSPACE AND DEFENSE FIRM.

THE GENERAL MOTORS DECISION TO SELL HUGHES AIRCRAFT'S DEFENSE OPERATIONS WILL ALLOW THE AUTOMAKER TO CONCENTRATE ON ITS CORE BUSINESS. G-M CHAIRMAN JACK SMITH.

// SMITH ACT //

WITH THE DEFENSE INDUSTRY GOING THROUGH A MAJOR CONSOLIDATION, IT HAS ALSO BECOME CLEAR TO THE MANAGEMENT TEAMS OF G-M AND HUGHES THAT THE MERGER REPRESENTS THE BEST OPPORTUNITY FOR HUGHES'S DEFENSE BUSINESS TO REMAIN A COMPETITIVE PARTICIPANT IN THE INDUSTRY.

// END ACT //

MASSACHUSETTS-BASED RAYTHEON MAKES RADAR AND AVIONICS SYSTEMS, BUT IS PERHAPS BEST KNOWN FOR PRODUCING THE PATRIOT MISSILE THAT WAS USED DURING THE GULF WAR TO TAKE OUT IRAQI SCUDS. THIS MERGER CONTINUES THE RAPID CONSOLIDATION IN THE MULTI-BILLION DOLLAR DEFENSE CONTRACTING BUSINESS. IT WAS JUST LAST MONTH THAT BOEING -- THE WORLD'S LARGEST MAKER OF COMMERCIAL AIRCRAFT -- MERGED WITH MCDONNELL DOUGLAS IN A DEAL WORTH MORE THAN 13 BILLION DOLLARS. (SIGNED)

NEB/NJS/PT

16-Jan-97 8:51 PM EST (0151 UTC)
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Source: Voice of America