RAYTHEON HAS signaled its intention to maintain a leading position in the consolidating US defence sector with an agreement to acquire defence-communications and intelligence specialist E-Systems for $2.3 billion.

Raytheon's defence interests fell to 35% of overall turnover in 1994. The acquisition of E-Systems, announced on 3 April, will push the figure close to 50%.

The acquisition will also boost Raytheon's annual turnover by $2 billion, taking it up to $12 billion, while the group will net another $2.6 billion of backlog.

The deal would see E-Systems become a wholly owned subsidiary of Raytheon, but it would retain its own identity and a separate Dallas, Texas, headquarters.

The acquisition is a bolt on to the Raytheon group, rather than an opportunity for rationalisation. While Raytheon produces a variety of tactical missiles, including the Patriot air-defence system, E-Systems' mainstream business is in areas such as reconnaissance and signals intelligence, working on such programmes as the USAF's Boeing RC-135s.

Raytheon had previously been thwarted in a series of attempted acquisitions, most recently losing to Loral in bidding for computer giant Unisys' defence division.

E-Systems has been a take-over target for the past two years, with Northrop Grumman, Hughes Aircraft and Loral all having been considered as potential purchasers.

Source: Flight International