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Exhibit 99
Information
BAE SYSTEMS NORTH AMERICA
TO ACQUIRE AEROSPACE ELECTRONICS SYSTEMS BUSINESS
FROM LOCKHEED MARTIN FOR $1.67 BILLION CASH
o Transaction Expected to Close Around Year-End
o Action Consistent With Corporation's Strategic Initiatives
BETHESDA, MD, July 13, 2000 - Lockheed Martin Corporation (NYSE:LMT) and BAE
SYSTEMS North America, Inc. announced today that they have reached a definitive
agreement under which BAE SYSTEMS North America will acquire Lockheed Martin's
Aerospace Electronics Systems business for $1.67 billion in cash. BAE SYSTEMS
North America, a Delaware corporation, is a wholly-owned subsidiary of BAE
SYSTEMS plc, Farnborough, England.
Lockheed Martin Aerospace Electronics Systems (AES) comprises the Sanders,
Fairchild Systems and Space Electronics & Communications businesses with
principal facilities in New Hampshire, New York and Virginia. Major AES
products include aircraft self-protection systems; tactical surveillance and
intelligence systems; reconnaissance and navigation systems; automated mission
planning systems; microwave electronics; infrared sensors; and radiation-
hardened digital components and systems for space applications. The AES
businesses, with approximately 5,300 employees, had equivalent 1999 revenues of
$1.2 billion.
"This proposed transaction advances our strategic initiatives to refocus the
Corporation, generate cash and reduce debt," said Lockheed Martin Chairman and
Chief Executive Officer Vance D. Coffman. "Our Aerospace Electronics Systems
businesses are highly regarded by their customers and within the industry, and
we are confident that under the stewardship of BAE SYSTEMS North America they
will remain strong contributors to their military, civil government and
commercial customers, both in the U.S. and internationally. We believe the sale
supports U.S. Department of Defense objectives and transatlantic cooperation."
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Robert B. Coutts, Executive Vice President of the Lockheed Martin Systems
Integration business area, of which AES is part, stated that the transaction
also will promote improved interoperability and cooperation between the armed
forces of the United States and its allies. "By advancing transatlantic
industry consolidation, as U.S. defense leaders have recently urged, we are
confident we will receive all necessary government approvals in a timely
manner," Coutts said.
The proposed transaction, which is subject to regulatory approvals, is expected
to close around year-end 2000. The parties also will voluntarily seek review by
the Committee on Foreign Investments in the United States. Coutts noted that,
"Lockheed Martin and BAE SYSTEMS North America are committed to working in
partnership to secure all required approvals as promptly as possible."
The transaction will yield approximately $1.3 billion in cash to Lockheed Martin
after transaction costs and associated federal tax payments. As previously
announced, Lockheed Martin expects to apply the bulk of this cash to debt
reduction. The transaction will require Lockheed Martin to record an after-tax
non-recurring charge of approximately $1 billion, or approximately $2.50 per
diluted share of the Corporation's common stock, in the third quarter of 2000.
This charge results mainly from goodwill and intangibles associated with the AES
businesses.
AES was among several operations identified by Lockheed Martin as candidates for
potential divestiture in September 1999, following a comprehensive strategic
review of the Corporation's businesses. Lockheed Martin divested its Hanford
Corporation subsidiary in December 1999; announced the proposed sale of its
Control Systems business to BAE SYSTEMS North America in April 2000; and
currently is evaluating other divestiture candidates, including its state and
local government services business, as previously disclosed.
"We are making excellent progress on the execution of our plan to refocus
Lockheed Martin," Coffman said, noting that the Control Systems divestiture
remains on track to close during the
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third quarter of 2000. "Our objective is to deliver superior performance for our
principal customers in aeronautics, space, systems integration and technology
services, and to manage our business strategically in a way that creates value
for Lockheed Martin's shareholders."
Under the agreement approved today by the Boards of Directors of both
corporations, BAE SYSTEMS North America will acquire all of the assets of
Lockheed Martin's Aerospace Electronics Systems, including Sanders operations in
Nashua, NH, Lexington, MA, Yonkers, NY, and Pomona, CA; the Fairchild Systems
operation in Syosset, NY; and the Space Electronics & Communications operation
in Manassas, VA. BAE SYSTEMS North America will offer employment to AES' active
employees - including approximately 3,900 at Sanders, 950 at Fairchild Systems,
and 450 at Space Electronics & Communications - who will join BAE SYSTEMS North
America's 18,300 employees in the U.S. and Canada upon closure of the
transaction.
Bear, Stearns & Co. Inc., acted as financial advisor to Lockheed Martin.
Headquartered in Bethesda, Maryland, Lockheed Martin is a global enterprise
principally engaged in the research, design, development, manufacture and
integration of advanced technology systems, products and services. The
Corporation's core businesses are systems integration, space, aeronautics and
technology services. Lockheed Martin had 1999 sales surpassing $25 billion and
employs approximately 140,000.
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NEWS MEDIA CONTACT: Pete Harrigan, 301-897-6171
INVESTOR CONTACTS: James Ryan, 301-897-6584
Randa Middleton, 301-897-6455
LOCKHEED MARTIN SAFE HARBOR STATEMENT: Statements in this press release are
considered forward-looking statements under the federal securities laws,
including the Private Securities Litigation Reform Act of 1995, including the
statements relating to projected future financial performance. Sometimes these
statements will contain words such as "believes," "expects," "intends," "plans"
and other similar words. These statements are not guarantees of our future
performance and are subject to risks, uncertainties and other important factors
that could cause our actual performance or achievements to be materially
different from those we may project.
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In addition to the factors set forth in our filings with the Securities and
Exchange Commission (www.sec.gov), the following factors could affect the
forward-looking statements contained in this press release: timing of regulatory
process, conditions imposed by regulatory agencies, uncertainties involved in
foreign ownership of companies involved in defense contracting, the political
and economic climate domestically and internationally, the ability to obtain or
the timing of obtaining future government awards and approvals, the availability
of government funding and customer requirements, economic conditions,
competitive environment, timing of awards and contracts. These are only some of
the numerous factors which may affect the forward-looking statements in this
press release.
