Raytheon-TI lag may slow deal for Hughes

Electronic News, March 24, 1997 by Carol Haber

In response to a question on the possibility of the monolithic microwave chip issue becoming a stumbling block, the Raytheon spokesperson emphatically replied: "There are 23 companies both foreign and domestic that have this capacity in what is called the gallium arsenide chip business. Sixteen U.S. companies currently supply GaAs-based chips to DOD; nine companies have the capability and capacity right now to supply power-amplified Xband MMIC chips that are under discussion. They include Raytheon and TI, but also TRW, Lockheed-Martin and Northrop Grumman, among others. All of the nine companies are in a good position to produce both the chips as well as transmit/receive the modules that the chips go into. This is a highly competitive and rapidly growing MMIC marketplace and this deal would not in any way substantially reduce competition in MMICs."

The combination of Raytheon and TI has been estimated by research organizations to hold about 10 percent of the business.

TI stuck to its prediction of a 2Q wrap-up date with Raytheon, as indicated by a spokesperson.

Next-in-line GM said it is still "tentatively contemplating a third-quarter scenario" for the closing of the Hughes deal.

At Hughes Electronics, though, a spokesperson pushed it out a little further: "We're probably looking now at some time in the latter part of the third quarter. We had originally hoped for the latter part of summer, maybe July or August, but that was on the assumption papers would have been filed in February, which didn't occur. It is being pushed back now. The driving factor is the government review, which sets the parameters for the merger; then it goes to the shareholders for a vote. The vote and distribution of the prospectus could be about an eight-week process."

He noted: "The latter part of 3Q97 ends at Sept. 30. Even that may be optimistic."