UK-based electronics conglomerate General Electric Company is to acquire Tracor Inc, a US defense electronics and information technology supplier headquartered in Austin, Texas. It will then merge it into the US arm of its GEC-Marconi operating group. In February the group completed a series of sell-offs of what it defined as non-core businesses (CI No 3,349), enabling it to redirect its attentions to the defense sector with cash in hand. The idea in acquiring Tracor is to combine the US company’s expertise in defense-oriented software with GEC-Marconi’s prowess in sensor and communications hardware, consolidating the latter’s position in the electronic warfare equipment market. GEC also hopes to leverage its US business thanks to Tracor’s good relations with the US Department of Defense. On the international front, GEC should see its defense systems offering enhanced by Tracor products, while the US company gains access to the global market thanks to the British group’s extensive sales presence around the world. Total goodwill involved in the deal is put at $1.1bn, which GEC says it plans to amortize on a straight line basis over 20 years. Meanwhile the total consideration, including assumed debt, which the UK conglomerate will be offering to Tracor shareholders, at a rate of $40 per share, amounts to $1.4bn.
