Grumman agrees bid by Martin Marietta

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The Independent Online
GRUMMAN, the maker of some of America's most famous combat aircraft, has become the latest US defence contractor to throw in the towel, agreeing yesterday to a dollars 1.9bn takeover by Martin Marietta Corporation, writes Larry Black.

Martin Marietta will begin a dollars 55- a-share cash tender offer today for the company, whose operations centre on Long Island near New York. Grumman, which abandoned the military aircraft business several years ago, remains a leader in airborne surveillance systems, defence electronics and computer information systems.

Analysts said these divisions, which had sales last year of dollars 3bn, should complement Martin Marietta's businesses well with only minimal overlap. But there will inevitably be redundancies among Grumman's 18,000 employees as they are integrated into Martin Marietta's 93,000-strong workforce.

The acquisition confirms the consolidation of much of the US defence electronics and space business in Martin Marietta, one of the few Pentagon contractors growing in this period of shrinking military expenditure.

Last April, the company combined its aerospace businesses with those of General Electric in a share- swap deal worth more than dollars 3bn.

Late last year, it also paid dollars 200m to purchase the space-systems business of General Dynamics. In 1993, Martin Marietta had sales of dollars 9.44bn, and had an order backlog of dollars 16.7bn. Grumman adds an additional dollars 6bn worth of outstanding orders to its books.

The company, based in Washington, now ranks as the country's largest defence electronics company.