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Raytheon to Purchase British Jet Maker : Aircraft: The U.S. firm could offer a comprehensive line of business planes on a worldwide basis.

June 02, 1993|From Reuters

LEXINGTON, Mass. — Raytheon Co., the maker of Beechcraft airplanes and Patriot missiles, has agreed to buy the Corporate Jets business of British Aerospace for $390 million in cash, the companies said Tuesday.

Corporate Jets makes models 125-800 and 125-1000 jets, which seat up to 12 passengers.

The unit earned $9.36 million in operating profit in 1992, when its sales were $480 million. At the end of last year, it had an order backlog of 22 aircraft valued at $285 million.

Raytheon said the business jets would complement Beech Aircraft's present line of business turboprops and light jets and would allow it to offer a comprehensive line of business aircraft on a worldwide basis.

It said the addition of the Corporate Jets business would boost its annual sales in the business aircraft market to more than $1.7 billion.

Lexington, Mass.-based Raytheon said it plans a "thorough study" after the deal is finalized to determine how to integrate Corporate Jets with its existing aircraft business.

"In the course of its study, Raytheon will review all of its options--including location, production schedules, engineering activities, marketing and sales, final assembly and completion, product support, management information systems and procurement," Raytheon said.

Corporate's 125 series jets were launched in 1964, and more than 800 of the planes have been sold. They are made in Britain and in the United States at Little Rock, Ark.

Raytheon's Beech Aircraft unit is in Wichita, Kan.

The British Aerospace unit, with estimated net assets of $303 million, is being sold free of debt.

Regulatory approval is required for the transaction.

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