Lockheed, Martin seek LTV units Tab for aerospace, missile businesses put at $350 million.

February 04, 1992|By Thomas C. Hayes | Thomas C. Hayes,New York Times News Service

DALLAS -- LTV Corp. said yesterday that it had agreed to sell its historic -- and profitable -- aerospace and missile businesses to a new company formed by Lockheed Corp. and Martin Marietta Corp.

Terms of the deal were not disclosed, but analysts estimated the price at about $350 million in cash.

LTV has been in bankruptcy since July 1986, when it contended that future pension claims of $2 billion in its steel operations were too costly for the company to honor. After a long legal battle, the Supreme Court ruled in 1990 that LTV must pay the claims.

The sale of the aerospace and missile businesses is subject to approval by the U.S. Bankruptcy Court for the Southern District of New York.

Charles Manor, a spokesman at Martin Marietta's headquarters in Bethesda, Md., said the two buyers expect to win the court's backing. "We've reached this point with that level of optimism," he said.

Martin Marietta has 1,100 employees in Glen Burnie and 2,200 in Middle River.

The final terms of the proposed sale to Lockheed and Martin Marietta will be announced within two weeks, Charles R. Palmer, a spokesman for LTV, said yesterday.

The aerospace unit makes parts of the B-2 stealth bomber, the C-17 air transport and the tails of Boeing commercial planes.

Sales of the two businesses last year accounted for about one-third of LTV's $6 billion in 1991 revenue.

The new company will be called Vought Corp., after the founder of LTV's aerospace operations, Chance Vought.

The original company, established on Long Island in 1917, produced the VE-7, the first plane to fly from an aircraft carrier in the 1920s, and the F-4U Corsair, which flew hundreds of missions against the Japanese during World War II.

LTV, which will remain the nation's third-largest steelmaker, has operated under court protection from creditors in one of longest-running bankruptcies involving a big corporation.

The Lockheed-Marietta bid might have been more attractive to LTV than others because the two companies wanted to buy the aircraft and missile operations. Other bidders may have sought only one piece, said Michael Lauer, a military-industry analyst at Kidder, Peabody & Co.

With few financial details to work with, investors apparently were cautious. The share prices of Martin Marietta and Lockheed were unchanged in trading yesterday on the New York Stock Exchange.

Martin Marietta closed at $52 a share, and Lockheed finished the day at $41.50. LTV gained 25 cents, to $1.375.

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