FOR IMMEDIATE RELEASE                                          AT
WEDNESDAY, JULY 2, 1997                            (202) 616-2771
                                               TDD (202) 514-1888
                                
 JUSTICE DEPARTMENT REQUIRES RAYTHEON AND TEXAS INSTRUMENTS TO
  DIVEST KEY UNIT BEFORE APPROVAL OF THEIR $2.9 BILLION MERGER


Justice says Merger as Originally Structured Would Have Resulted
  in Monopoly of Important Radar Component for Defense Market 
                                

     WASHINGTON, D.C. -- The Department of Justice reached a
settlement today with the Raytheon Company that will allow the
company to go forward with its $2.9 billion acquisition of Texas
Instruments' Defense Systems and Electronics Unit, as long as
Raytheon sells the Texas Instruments business unit that produces
a key component for radar systems.  The merger as originally
proposed would have resulted in higher prices paid by the
Department of Defense--and ultimately by taxpayers--for advanced
military radars used in major weapon systems.

     Today's divestiture is the largest since the post-Cold War
effort to consolidate the defense industry began.

     "Our action today demonstrates that we're not going to give
carte blanche approval to mergers in the defense industry," said
Joel I. Klein, Acting Assistant Attorney General in charge of the
Department's Antitrust Division.  "While industry downsizing can
be desirable, or even necessary, we will do what it takes to
preserve effective competition. 

     "This settlement requires the divestiture of an entire
business unit.  We looked at a number of narrower alternative
remedies but neither we nor the Department of Defense would
accept a band-aid solution to fix this serious competitive
problem," added Klein.

     The Department's Antitrust Division filed a lawsuit and a
proposed settlement today in U.S. District Court in Washington,
D.C.  If approved by the court, the proposed consent decree would
settle the suit.

     According to the complaint, the Department said that
Raytheon and Texas Instruments have competed aggressively in the
past to develop leading edge high power amplifier monolithic
microwave integrated circuits (MMICs), and their research and
development efforts have positioned them as the only firms able
to supply competitive MMICs for major Defense Department radar
programs.  These high power amplifier MMICs extend the power and
range of radars, enabling them to scan the airspace quickly and
efficiently, with a lower probability of detection by enemies.

     The complaint further stated that Raytheon also is a leading
producer of the radar systems that incorporate high power
amplifier MMICs.  Because of this, without the settlement
Raytheon might have tried to disadvantage its radar competitors-
-such as Northrup Grumman, Lockheed Martin and Hughes Aircraft--by
refusing to sell, or selling on unfair terms, its state-of-the-
art high power amplifier MMICs, and thus would have harmed
competition for critical military radar programs. 
     
     Under the terms of the settlement, Raytheon is required to
sell Texas Instruments' MMIC business within 180 days, or within
five days from the time the court approves the settlement, to a
firm having both the capability and intent to continue to
develop, make and sell MMICs that meet Defense Department
requirements.

     Raytheon and Texas Instruments currently are the only firms
able to develop and produce high power amplifier MMICs that will
be critical for the more than $10 billion investment the Defense
Department will make in the next two to three years for the next
generation of radar systems.  Defense Department programs such as
the Joint Strike Fighter, the Medium-Extended Air Defense System,
the Navy Multifunction Radar and the Theater High Altitude Area
Defense System use these high power amplifier MMICs.  

     Today's settlement will ensure that a viable competitor to
Raytheon will be in position to provide the MMICs necessary for
these programs, the Department said.

     "We greatly appreciate the work done by the Department of
Defense in this matter.  This settlement, along with the
investigation leading up to its filing, was a model for inter-
agency cooperation.  The U.S. government has a uniform view that
competition has a key role to play in protecting our national
security interests," added Klein.

     Raytheon is a Delaware corporation headquartered in
Lexington, Massachusetts, with 1996 sales of about $12 billion. 
Raytheon produces aircraft, guided missiles, space vehicles,
radar systems, and defense electronics equipment. 

     Texas Instruments is a Delaware corporation headquartered in
Dallas, with total sales in 1996 of about $13 billion.  Texas
Instruments' Defense Systems and Electronics Unit produces guided
missiles, electro-optical systems, and defense electronics
equipment.  That unit's 1996 sales were about $1.3 billion.

     As required by the Tunney Act, the proposed consent decree
will be published in the Federal Register, along with the
Department's competitive impact statement.  Any person may submit
written comments concerning the proposed decree during a 60-day
comment period to J. Robert Kramer, Litigation II Section,
Antitrust Division, U.S. Department of Justice, 1401 H St., N.W.,
Suite 3000, Washington, D.C.  20530.

     At the conclusion of the 60-day comment period, the court
may enter the consent decree upon its finding that it serves the
public interest.

     The Antitrust Division's review of the proposed
Raytheon/Hughes acquisition is continuing.

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