Raytheon sells aircraft unit for $3.3 billion; to focus on defence

21 December 2006

The world's largest missile maker, Raytheon Co, that makes the Tomahawk cruise missile is exiting its last commercial business with the sale of its its wholly owned business-jet subsidiary, Raytheon Aircraft Company, for $3.3 billion.

According to an agreement, it will sell the aircraft unit to Hawker Beechcraft Corporation, a new company formed by GS Capital Partners, an affiliate of Goldman Sachs, and Onex Partners, the Canadian buyout firm that was involved in the takeover of Australian carrier Quantas, earlier this month.

The sale of its aircraft unit is the largest divestiture by Raytheon, which makes the Tomahawk cruise missiles. Over the last decade US defence contractor has divested its commercial businesses, ranging from engineering and construction to publishing, commercial laundry, heat, air conditioning and home appliance which it had been acquiring from the 1960s through the 1990s, in an attempt at diversification.

So far it has divested 33 commercial and defence units for around $4.4 billion. Raytheon says it now plans to refocus on government and defence clients.

"The sale of Raytheon Aircraft Company further demonstrates our commitment to deliver on the company's strategy of focusing on our core government and defence business and providing the best technology, solutions and mission support to our global customers," said William H Swanson, Raytheon's Chairman and CEO.