Chrysler Finds Buyer for Defense and Aerospace Units

04/09/96

The United Press International reported that Raytheon Company's E-Systems Inc. will buy Chrysler Corporation's Electrospace Systems Inc. and Chrysler Technologies Airborne Systems Inc. for $475 million. Raytheon will fork out $455 million in cash and a $20 million dividend for the Chrysler divisions.

Electrospace Systems Inc is Chrysler's defense electronics unit. The unit, based in Richardson, Texas, specializes in command, control and communication, telecommunication, and intelligence and electronic warfare systems for government and commercial users. The division employs approximately 1,100.

Chrysler Technologies Airborne Systems, headquartered in Waco, Texas, is Chrysler's airborne systems unit. The unit designs, installs and integrates complex special purpose airborne systems and aircraft modifications for government and commercial customers. It employs approximately 1,700.

For Chrysler, the sale reflects the corporation's strategy of focusing on their core automotive business, a policy dictated in part by an agreement with Kirk Kerkorian, the billionaire businessman who tried to take over the corporation recently. The deal constitutes Raytheon's second major acquisition of a government and defense electronics company in the past 12 months. Last May Raytheon bought the $2 billion E-Systems of Dallas, Texas.

Paul Dever -- The Auto Channel