Texas Instruments agrees to sell defense operations for $2.95 billion

DALLAS (AP) _ Texas Instruments has agreed to sell its defense operations to Raytheon Co. for $2.95 billion in cash in the latest marriage in the defense industry, the companies announced today.

Raytheon, based in Lexington, Mass., already produces missiles as well as aircraft training systems.

The companies have complementary units that produce sensors and seekers, aircraft and radars and secret ``black″ electronics systems for the Pentagon.

The Wall Street Journal, which reported on the deal in today’s editions in advance of its formal announcement, said Raytheon had beaten a competing bid by Northrop Grumman Corp. for the Texas Instruments operations.

The paper also said the move may be aimed at boosting Raytheon’s chances of an even bigger acquisition as General Motors Corp.’s Hughes Electronics subsidiary begins to auction off its own defense holdings.

Dennis J. Picard, Raytheon chairman and chief executive, said in announcing the deal that it ``opens new defense markets worldwide″ for his company.

He said it boosts Raytheon’s defense electronics sales to $8 billion a year and its defense electronics backlog to $9.3 billion.

Texas Instruments employs about 12,000 people in its Defense Systems & Electronics group. It expected 1996 revenues of about $1.8 billion.

The division, based in suburban Lewisville, makes precision-guided weapons, anti-radiation and strike missiles, airborne radar, night vision systems and electronic warfare systems.

Its HARM and Paveway systems constituted 65 percent of the air-delivered weapons used by Persian Gulf War forces, the company said.

The deal is expected to close in the second quarter after federal antitrust scrutiny, the companies said.

Thomas J. Engibous, president and chief executive of Texas Instruments, said the deal united his company’s defense business with a larger defense contractor and frees Texas Instruments to focus on other areas.