Northrop Grumman is to acquire the defence-electronics and air-traffic-control (ATC) equipment businesses of Westinghouse for $3 billion. The aerospace and defence concern won a bidding war against a list of rivals which reportedly also included Hughes Aircraft, Raytheon, Lockheed Martin and Loral.
Northrop Grumman says that it expects to close the deal by 31 March, once Governmental and regulatory reviews are completed. Westinghouse elected to sell the operations to help pay for its recent $5.4 billion purchase of CBS, the US television network.
"This acquisition will place Northrop Grumman in a significant growth mode for the future. Northrop Grumman's total revenues by the year 2000 could easily exceed $10 billion," says Kent Kresa, the firm's president and chief executive.
The Westinghouse unit, the latest victim of a string of consolidation deals in the US aerospace and defence industry, employs 12,000 workers. Sales in 1995 are expected to total $2.6 billion. Products include radar for the Lockheed Martin F-16, McDonnell Douglas F/A-18, Boeing E-3 airborne warning and control system and the Northrop Grumman E-8 Joint STARS.
It also provides a range of ATC radar, electronic counter-measures, tactical communications equipment, electronics for under sea applications and marine products.
Northrop Grumman, on the other hand, has 37,000 workers and expects to report 1995 sales of about $6.8 billion, covering areas such as defence electronics, surveillance aircraft, aero-structures and missiles. It was formed in May 1994, following Northrop's acquisition of Grumman. Later that year, the company completed the take-over of Vought Aircraft.
The acquisition is expected to make Northrop Grumman the fourth-largest aerospace company in the USA.
Source: Flight International
