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News Release


IMMEDIATE RELEASE

Release No: 354-97
July 02, 1997

DOD FINDS RAYTHEON'S ACQUISITION OF TEXAS INSTRUMENTS' DEFENSE SYSTEMS AND ELECTRONICS GROUP ACCEPTABLE, EXCEPT FOR ONE AREA

Deputy Secretary of Defense John P. White today advised the Antitrust Division of the Department of Justice that the proposed acquisition of Texas Instrument's defense business by Raytheon Company was acceptable to the Department of Defense except in one area.

In a letter to the Department of Justice, White stated DoD's conclusion that, "The acquisition would not adversely affect competition for Department of Defense purchases in any areas except certain programs relying upon Monolithic Microwave Integrated Circuits (MMICS). We believe that a divestiture in this area is required to ensure that our requirements for effective competition will be met." White noted that the consent agreement between DoJ and the companies resolves DoD's concerns.

The DoD reached its decision after a comprehensive review of the transaction and its effect on defense programs. The Department carefully examined ongoing and anticipated programs, as well as markets, where these two companies compete. The Department also examined vertical relationships affected by this transaction.

The Department's review reflects the priority it places on maintaining competition for DoD purchases, and it also demonstrates the Department's continued support for the restructuring of the defense industry. During the review, DoD staff worked closely with the staff of DoJ's Antitrust Division. In his letter, White praised the cooperation between the two agencies.

A copy of Deputy Secretary White's letter is attached.


DEPUTY SECRETARY OF DEFENSE

1010 DEFENSE PENTAGON WASHINGTON, DC 20301-1010

  • Mr. Joel I. Klein, Esq.
  • Acting Assistant Attorney General
  • Antitrust Division
  • 950 Pennsylvania Avenue, NW
  • Washington, DC 20530

Dear Mr. Klein:

The Department of Defense has completed a comprehensive review of the proposed acquisition of Texas Instruments Defense Systems and Electronics Group by Raytheon Company. During our review, we carefully examined ongoing and future programs of the Department in which the two companies compete or can be expected to compete. We also examined the markets in which these two companies are, or are likely to be, defense suppliers, as well as the vertical relationship involving these two and other firms.

We concluded that the acquisition would not adversely affect competition for Department of Defense purchases in any area except certain ongoing programs relying upon monolithic Microwave Integrated Circuits (MMICs). We were also concerned about the effect of the acquisition on future related competitions. Based on our analysis, we believe that a divestiture in this area is required to ensure that our requirements for effective competition will be met. The consent agreement resolves these concerns.

I sincerely appreciate the cooperation that has taken place between the Department of Justice and the Department of Defense during our respective assessments of this transaction. This has been one of the Department's most complex reviews and could not have been accomplished in this period of time or with this level of scrutiny without the outstanding cooperation between our respective staffs. From my point of view, the public interest was wellserved by their efforts.

Sincerely,