Litton Industries, continuing its strategy of acquisition and diversification, has no intention of being acquired itself, president and chief operating officer Michael Brown said at the show yesterday.

Brown spelled out why he believes Litton will be a survivor in the huge aerospace shakeout under way in the United States.

"We have substantial growth plans and we will continue returning value to shareholders. We don't see us being taken over," he said.

Litton has acquired six companies in the last 16 months, raising its non-defence portfolio of work from 10% of sales in 1994 to about 25% this year.

The figure is predicted to rise to between 40 and 50% of sales within four or five years.

"We have a $7.4 billion backlog and all the other financial indicators - sales, earnings and cash flow - are positive," he said.

The acquisition strategy, combined with internal growth and global expansion policy, will continue, he said, with a focus on high growth in the non-defence areas. Global sales currently account for 20% of overall turnover.

A supplier on a range of military aircraft programmes the company intends to "maintain and strengthen" its position in the military market place.

 

Racal target for acquisition

The progress of UK avionics specialist Racal is being closely watched by Litton Industries as the US company looks for acquisition targets, reports Air Transport Intelligence (ATI) today.

The Flight Daily News sister product, being launched at Paris as an online news and data service, says Litton managers admire several of diversified Racal's products.

Racal has been buffeted on the UK stock market for the past year and some analysts believe it is ripe for a break-up.

ATI says Litton president Michael Brown's presentation yesterday underplayed the level of interest in European expansion inside the company. It reports that other managers are looking hard at acquisition candidates on the continent.

A complete acquisition of Racal is not on the agenda, but the UK company is highly devolved and several of its business units are seen as being attractive in their own right.

A difficulty with a deal over the Racal Avionics unit is that it is closely linked with Honeywell which, in turn, is in the midst of highly acrimonious litigation with Litton.

Source: Flight Daily News