Raytheon has failed to find a buyer for its aircraft manufacturing unit after almost a year of trying, according to media reports. The US group may now be forced to reduce its asking price of $4 billion or sell Raytheon Aircraft (RAC) off piecemeal. One possible bidder, France's Dassault Aviation, confirms that it is "looking" at the business, but is concerned that the US company's diverse aircraft portfolio is poorly matched to its own.
In addition to lucrative corporate aircraft, RAC's product mix includes light aircraft, regional airliners, military trainers, a fractional-ownership programme and a fixed-base operator chain. The US Wall Street Journal says potential buyers General Dynamics (GD), Carlyle Group and Dassault Aviation have all decided not to bid for the Wichita, Kansas-based operation, although the French company tells Flight International it still has a tentative interest.
"We're not 'a priori' interested," says a company source. "We are simply looking at any possible benefits. Our aircraft begin at $19 million apiece; theirs end at $15 million. It adds that the $4 billion price tag is "too high".
Other players, including Cessna parent Textron and Learjet owner Bombardier, are considered unlikely bidders, with the latter company dismissing reports of its interest as "speculation".
Buoyed by the booming business jet market, RAC is profitable. Its sale would help Raytheon - primarily a defence electronics and missiles house - reduce the debt accumulated through a spate of aerospace and defence mergers.
Raytheon itself will neither confirm nor deny that RAC is for sale, but it is reported to have appointed Credit Suisse First Boston as an advisor. Like other manufacturers, RAC is increasing output while launching new products, but is suffering development delays with its newest aircraft, the entry-level Premier I and super mid-size Hawker Horizon.
Delivery of the Premier is now scheduled to begin this quarter, and the Horizon in 2002. Orders for the pair account for a large part of RAC's record $4.3 billion backlog. Raytheon is still investing in RAC, approving the recent launch of the Hawker 450 light mid-size business jet.
GD has been touted as the most suitable buyer for RAC. There is no overlap between the large business jets built by its Gulfstream subsidiary and RAC's products, but they are involved in rival fractional ownership operations. Dassault's Falcon business jets offer little overlap, while Bombardier and Cessna compete head-on with a range of RAC products.
One scenario could see GD bid for RAC's business jets, Carlyle take on Raytheon's Travel Air fractional business and the FBOs (to complement its own) and Cessna buy the non-competing low-end products. Such a deal, however, would still leave products such as the Beech 1900D regional airliner and T-6A Texan II military trainer, both turboprops, homeless.
Source: Flight International
