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Motorola sells unit
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August 6, 2001: 8:10 a.m. ET
General Dynamics to acquire information systems for $825M in cash
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NEW YORK (CNNfn) - Aerospace manufacturer General Dynamics Corp. said Monday it has agreed to buy communications equipment maker Motorola Inc.'s integrated information systems group for $825 million in cash and the assumption of certain debt.
The transaction is expected to add immediately to General Dynamics' (GD: Research, Estimates) earnings, the Falls Church, Va.-based defense contractor said.
Motorola's (MOT: Research, Estimates) information systems unit, based in Scottsdale, Ariz., provides defense and government customers with secure communication and situational awareness technologies. It employs 3,000 people and anticipates 2002 revenue of $830 million.
"This acquisition strengthens our position in communications and information technology for military and government customers," General Dynamics CEO Nicholas Chabraja said Monday. "In addition, there is real synergy with other elements within our Information Systems and Technology group."
The boards of directors of both companies approved the deal, which is expected to close within 60 days.
Motorola apologized last month to investors for not protecting shareholder value and vowed to improve the stock through a stronger balance sheet and new products.
General Dynamics shares ended down 74 cents at $82.67 Friday. Motorola shares, which have been trading at about half their 52-week high, ended 77 cents lower Friday at $18.63. 
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