Lockheed predicts cuts if merger falls through

November 10, 1994|By Bloomberg Business News

WASHINGTON -- Lockheed Corp. expects to take a $200 million pretax charge for cost-cutting moves should its merger with Martin Marietta Corp. fail to go through, according to a filing with the Securities and Exchange Commission yesterday.

At the same time, Calabasas, Calif.-based Lockheed said it expects its merger with Bethesda-based Martin to be completed in the first quarter of 1995.

According to Lockheed's 10-Q filing, the charge would cover costs associated with cutbacks in light of shrinking post-Cold War military spending.

Lockheed said it is evaluating whether to make cuts at Lockheed Missiles and Space Co. in Sunnyvale, Calif., but will not make a decision until the merger is decided.

Lockheed also said it is evaluating whether to close its commercial aircraft maintenance plant in Tucson, Ariz., which would result in a fourth-quarter pretax charge of $40 million.

Lockheed's planned merger with Martin Marietta has spurred five shareholder lawsuits seeking to block the merger, including four class-action suits, the company also disclosed in the filings.

The four class-action suits seeking to block the merger charge that Lockheed's board breached a variety of fiduciary duties, including allegations that the directors engaged in conflicts of interest and failed to maximize shareholder value by conducting an auction or allowing for some other open bidding.

The fifth suit, which makes similar charges, is filed on behalf of Martin Marietta shareholders and is directed at Martin's board.

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