Lockheed and Marietta Sign Deal on LTV Assets

Martin Marietta and Lockheed said Wednesday that they have signed a definitive agreement, through a new jointly owned company, to acquire LTV’s aircraft and missile business for $355 million.

But the French aerospace firm Thomson and the Washington-based Carlyle Group are expected to submit a last-minute offer directly to the U.S. Bankruptcy Court, which must approve the LTV sale.

The Martin Marietta and Lockheed deal includes $319 million in cash and $36 million in preferred stock. The two firms would hold the LTV operation through a newly created firm called the Vought Corp.

LTV’s aircraft and missile business had 1991 operating earnings of $131 million on sales of $1.7 billion--meaning that the sale price of $355 million is a mere 2.7 times current operating earnings. The extremely low price is an indication of how depressed defense industry assets have become.

Martin Marietta Chairman Norman R. Augustine and Lockheed Chairman Daniel Tellep said the deal would “strengthen American ownership of a respected U.S. aerospace company,” a clear message that U.S. ownership may be a major element of who wins the battle for LTV’s aerospace business. Lockheed, Martin and Thomson have all hired high-powered lobbyists to represent them.