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General Dynamics to Buy Plane Maker Galaxy

BRIEFLY / AEROSPACE

May 02, 2001|Reuters

General Dynamics Corp. said it will buy Galaxy Aerospace Co., a maker of mid-size business aircraft, for $330 million in cash, giving the defense contractor a presence in the fastest-growing segment of the executive jet market. General Dynamics also said Berkshire Hathaway Inc.'s Executive Jet Inc. ordered 50 of Galaxy's aircraft for delivery over the next five years. That order, valued at about $2 billion, includes maintenance services and options for 50 more planes. Under the acquisition, Galaxy's sellers may receive up to $315 million in additional payments through 2006. Fort Worth-based Galaxy, a joint venture formed in 1997 by Hyatt Corp. and Israel Aircraft Industries Ltd., was expected to generate 2002 revenue of $635 million. The transaction should close in June, said Falls Church, Va.-based General Dynamics, whose subsidiaries include Gulfstream Aerospace. Shares of General Dynamics rose 62 cents to close at $77.70 on the NYSE.

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