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HUGHES AIRCRAFT COMPANY TO ACQUIRE GENERAL DYNAMICS MISSILE BUSINESS

HUGHES AIRCRAFT COMPANY TO ACQUIRE GENERAL DYNAMICS MISSILE BUSINESS
 FALLS CHURCH, Va., May 11 /PRNewswire/ -- Hughes Aircraft Company and General Dynamics Corporation (NYSE: GD) today jointly announced that Hughes has agreed to acquire General Dynamics' missile business through the delivery to General Dynamics of approximately 21.5 million shares of GM Class H common stock (NYSE: GMH). Neither the effects of the acquisition nor the issuance of Class H shares is expected to dilute the earnings attributable to GM Class H common stock, on a per share basis.
 The General Dynamics missile business will be operated by Hughes Aircraft Company, a unit of General Motors' GM Hughes Electronics (GMHE) subsidiary. GM Class H common stock provides holders with financial returns based on the performance of GMHE.
 Under the terms of the agreement, Class H shares issued to General Dynamics may be sold in a secondary public offering, the timing and arrangement of which would be under GM's control. Such an offering is expected to occur as soon as practicable after the completion of the acquisition by Hughes and will enhance the liquidity of Class H shares. Shares not sold in such a public offering will be reacquired from General Dynamics on Sept. 30, 1993. In either case, General Dynamics will receive a minimum of $450 million for the shares. If the market value of the shares exceeds $450 million at the time of sale or reacquisition, Hughes and General Dynamics will share the excess value.
 "Management of Hughes expects that the acquisition will favorably impact the earnings performance of Hughes, thereby permitting additional investment in the continued growth of the company," said C. Michael Armstrong, chairman and chief executive officer of Hughes.
 "The acquisition fits our strategy to be a growth company," said Armstrong. "This transaction allows Hughes to strengthen its defense business -- particularly in areas where the company can sustain a leadership position -- while continuing its diversification into commercial and non-defense businesses."
 William A. Anders, chairman and chief executive officer of General Dynamics, said, "This transaction makes good sense for everyone. It brings together a broad line of products as well as superior manufacturing facilities, workforce skills and state-of-the- art technology. At the same time, it allows General Dynamics to build further financial strength as we focus on strengthening our four core defense businesses."
 Armstrong noted that the acquisition will enhance Hughes' ability to be competitive in a wide range of military missile systems, both here and abroad, and is a major step in achieving a more cost- effective defense industry. This outcome will result from the consolidation of the missile operations of both companies. The precise organizational structure, including the location and functions of the specific production and engineering activities, has not been announced.
 The acquisition, which is subject to normal government reviews, will include General Dynamics' Air Defense Systems Division, whose primary manufacturing facilities are in Pomona and Rancho Cucamonga, Calif., and the Unmanned Strike Systems portion of the Convair Division, whose primary plants are in San Diego and Sycamore Canyon, Calif. General Dynamics will retain ownership of the Rancho Cucamonga, San Diego and Sycamore Canyon facilities and will lease them to Hughes Aircraft.
 The business units being acquired have about 9000 employees. Major programs include the Standard shipboard surface-to-air missile, the Stinger man-portable anti-aircraft missile, the Tomahawk sea-launched cruise missile, Advanced Cruise Missile, and the Phalanx shipboard anti-missile gun and Rolling Airframe Missile ship self-defense systems.
 Hughes manufactures the AMRAAM advanced medium range air-to-air missile, Phoenix air-to-air missile, the Maverick air-to-ground missile, and the TOW anti-tank missile. Hughes has 7300 employees at its missile facilities in Canoga Park, Calif.; Tucson, Ariz.; La Grange, Ga.; and Eufaula, Ala.
 -0- 5/11/92
 /CONTACT: Alvin A. Spivak of General Dynamics, 703-876-3190 or, Ray Silvius of Hughes Aircraft Company, 310-568-6327/
 (GD GMH) CO: General Dynamics Corporation; Hughes Aircraft Company ST: Virginia, California IN: ARO SU: TNM


DS -- DC004 -- 8419 05/11/92 08:24 EDT
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Publication:PR Newswire
Date:May 11, 1992
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