E-Systems bought by Raytheon

The consolidation of the US defence industry continued yesterday with the $2.3bn (£1.44bn) acquisition of E-Systems, a leading military communications system builder, by Raytheon, the aerospace to consumer goods conglomerate.

Raytheon, which gained fame during the Gulf War with the spectacular success of its anti-missile Patriot defence system, has launched a tender offer worth $64 for each E-Systems share, a 41 per cent premium to Friday's closing price.

The deal has been approved by the boards of both companies.

Raytheon's chairman and chief executive, Dennis Picard, said: "The combination opens new defence and commercial markets worldwide, brings our annualized electronics sales to $6bn and our current electronics backlog to $8bn."

The Massachusetts-based Raytheon, a key Pentagon contractor, brings annual revenues of $10bn and 60,000 employees to the new grouping.

E-Systems, based in Dallas, Texas, will be the smaller partner. It had turnover of around $2bn last year and employed 16,000.