Raytheon has emerged as the victor in the contest to acquire Hughes Aircraft from General Motors.
Raytheon edged out Northrop Grumman in an auction which pushed the value of the deal up to $9.5 billion - including the take-over of $4.7 billion of debt. The transaction should be complete by the middle of the year.
John Weaver, currently president of Hughes Aircraft, is to become president of Raytheon Hughes Systems.
The acquisition follows Raytheon's agreement to acquire the missiles and defence-electronics holdings of Texas Instruments for $3 billion. Including Hughes, the new group would have sales of more than $13 billion in defence electronics, giving it a claim to world leadership.
Only Lockheed Martin ranks higher, if the group's space businesses are included.
GM will retain Delco Electronics, which manufactures automotive components, and the telecommunications and space business of Hughes.
The combined company is expected to have revenues of $21 billion this year, of which around $15.5 billion would be in aerospace and defence. This gives the group the number-three spot behind Boeing/McDonnell Douglas and Lockheed Martin in world aerospace sales.
The agreement needs the approval of US anti-trust agencies, since Raytheon, Hughes Aircraft and Texas Instruments all make tactical missiles.
Their combined sales in this sector are around $5 billion, making the group roughly twice the size of its nearest competitor. Paul Kaminski, the Pentagon's acquisition chief, recently expressed concern that the transaction might create excessive concentration in the missiles sector.
Raytheon also manufactures appliances and general-aviation aircraft, and Picard says that he "is taking a hard look at the commercial businesses and how they will proceed in the future", although he says the group is a "profitable leader in general aviation"and sees "a solid future" for Raytheon Aircraft.