Motorola Selling Off Scottsdale Based Group

Monday August 06 by S. Elwood
Fall Church, VA - Defense contractor General Dynamics will buy communications giant Motorola Inc.'s Integrated Information Systems Group for $825 million. The move is made in order to strengthen its position in communications and information technology. While both boards have approved the deal, it is subject to normal approval. The company expects it to close within 60 days. The Motorola business will then become part of General Dynamics' Information Systems and Technology group, the military contractor said.

Motorola's Integrated Information Systems Group which is based in Scottsdale, Arizona, provides defense and government customers with technologies, products and systems for secure communications and integrated communication systems. Mark Fried, corporate vice president and general manager of Motorola Integrated Information Systems Group, will remain president of the business after the deal closes.

Although Motorola Chairman and Chief Executive Christopher Galvin said that as his company increases its focus on "business areas central to its long-term strategy, we feel certain that General Dynamics, with its strong government focus, will be the right home for Integrated Information Systems' employees." He did not say whether the unit's 3,000 employees would keep their jobs.

General Dynamics said it would assume certain liabilities of the Motorola unit. It anticipates the unit will generate 2002 revenues of about $830 million and that the acquisition will increase its earnings immediately. As part of the transaction, Motorola and General Dynamics executed a series of agreements to give government customers continued access to applicable Motorola commercial technologies. Besides strengthening General Dynamics' position in communications and information technology for military and government customers, Chairman and Chief Executive Nicholas Chabraja said, it also strengthens the company's capabilities in command, control, communication, computers, intelligence, surveillance and reconnaissance. "In addition,'' he said, "there is real synergy with other elements within our Information Systems and Technology group.'' '

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