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GTE sells units for $1.05B
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June 22, 1999: 7:32 a.m. ET
General Dynamics buys defense communications systems operations
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NEW YORK (CNNfn) - General Dynamics, a maker of nuclear submarines and tanks, will buy three of GTE's defense communications systems units for $1.05 billion in cash, the companies said Tuesday.
The deal is expected to close within 60 days, with General Dynamics saying it expected the acquisition to immediately add to earnings.
The purchase gives Falls Church, Va.-based General Dynamics (GD) ownership of three GTE sites in Massachusetts and California with 6,200 employees and $1.2 billion in expected revenue this year.
Buying GTE's array of defense communications systems, which include command, control, intelligence, and electronic defense networks, more than doubles the size of General Dynamics' Information Systems and Technology business group, the companies said.
"This is a solid addition to our defense core and a superb strategic fit," said Nicholas D. Chabraja, General Dynamics chairman and chief executive officer. "We are committed to our defense customers and see significant growth opportunities in the defense electronics market."
For Irving, Texas-based GTE (GTE), the transaction is the most recent in the company's plan to sell non-core business assets to generate more than $3 billion. The telecommunications company is in the midst of a $53 billion merger with Bell Atlantic (BEL), which is expected to be completed either late this year or in early 2000.
General Dynamics shares gained 3/16 to 66-5/8 Monday. GTE stock fell 3/8 to 71-1/16.
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GTE
General Dynamics
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