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Raytheon, Hughes cleared
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October 2, 1997: 4:40 p.m. ET
Defense, Justice officials OK $9.5B merger upon condition of asset sales
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NEW YORK (CNNfn) - Raytheon Co. said on Thursday the U.S. Defense and Justice departments have conditionally approved its proposed $9.5 billion acquisition of Hughes Electronics Corp.'s defense operations.
"Despite the departments' conditions, we are very pleased with the outcome," said C. Michael Armstrong, Hughes' chairman and chief executive, said in a statement.
Under the agreement, Lexington, Mass.-based defense giant is required to sell portions of the infrared sensor business, which were recently purchased from Texas Instruments Inc.
The pact also requires Raytheon to divest a portion of the ground-based electro-optical systems business, which are part of the Hughes acquisition.
Raytheon is also required to take steps to preserve competition on an upcoming bid for a new missile.
Raytheon announced its plans to buy the defense assets of Hughes Electronics, a unit of General Motors Corp., in January 1997. The deal was part of the sweeping wave that included Boeing Co.'s purchase of McDonnell Douglas Corp. and Lockheed Martin Corp.'s surprise purchase of Northrop Grumman Corp.
Once the merger is completed, Raytheon will have more than 120,000 employees, about $20 billion in sales and the lead position in the defense electronics market.
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