DEFENSE MERGER TO GET FURTHER JUSTICE DEPT. REVIEW
In response to concerns raised by the aerospace industry, the Justice Department has
prolonged by one month its review of the Raytheon Corporation's proposed $3 billion acquisition of
the defense holdings of Texas Instruments Inc.
Northrop Grumman is concerned that Raytheon, which is simultaneously in the process of
acquiring Hughes Electronics for $9.5 billion, will acquire a strangle-hold in the area of weapons-
control radar systems for fighter planes. According to the Wall Street Journal, if the planned mergers
are approved by the Justice Department, the Lexington, Massachusetts-based Raytheon would control
the only two operations currently making microchips and other components for what essentially
constitutes the central nervous system of nearly all combat-aircraft radars.
Both Northrop Grumman and Lockheed Martin, whom the Los Angeles Times states has
also expressed concerns to Pentagon and Defense Department officials regarding the merger,
reportedly fear that Raytheon's potential monopoly on a key component of aircraft production will
hinder their ability to compete for future contracts.

Volume 4, Bulletin 8 -- March 6, 1997