Northrop to Buy Rest of Vought

Northrop Grumman Corp. said Tuesday that it agreed to buy the 51% of Vought Aircraft Co. it does not already own for $130 million from Carlyle Group, a Washington investment partnership.

Dallas-based Vought makes large sections of commercial and military airplanes, including Northrop’s B-2 Stealth bomber and Boeing Co.’s 747 jumbo passenger jet.

The deal is not a surprise. Northrop, the Los Angeles-based aerospace and defense concern that recently bought Grumman Corp. for $2.2 billion, was expected to buy the rest of Vought to further expand its airplane subassembly work.

Northrop’s Hawthorne operation, for instance, makes the fuselages for the 747, and its newly acquired Grumman unit makes wing sections, flaps and other parts for several Boeing jets.

However, Northrop exercised its option for the rest of Vought earlier than planned. When Northrop and Carlyle jointly bought Vought in 1992 from LTV Corp., Northrop was given the option to buy Carlyle’s share beginning in September, 1995.

But Northrop said it is buying Vought now because it is already in the process of merging Grumman’s aerostructures business with its own.

“As soon as they concluded the Grumman deal, it was clear that if they were going to do Vought, now was the time to do it,” said Jerry Cantwell, an aerospace analyst with Lionheart Research in New York. “Why go through all of that disruption twice?”

Cantwell also predicted that Grumman’s airplane parts units, located mostly along the East Coast, are “all going to migrate to Dallas” so Northrop can cut costs through streamlining.

That raised the question of whether Northrop also might weigh whether to shift its 747 work in Hawthorne, which employs 1,250 people, to Dallas. Northrop spokesman Tony Cantafio said it would be premature to comment on facilities, but added, “Clearly, we intend to maintain a 747 presence in California.”