Alliant Techsystems and Raytheon Enter Into New Strategic Alliance Agreement
Orders Under Separate Product Agreement Will Total at Least $235 Million
Jan 25, 1999
Alliant Techsystems (NYSE: ATK) said it has entered into a new strategic alliance agreement with Raytheon Company (NYSE: RTNA)(NYSE: RTNB) under which Alliant will act as a preferred strategic supplier to Raytheon Missile Systems.
Under the terms of the agreement, Alliant and Raytheon Missile Systems will work together on integrated product teams to identify next-generation products, define requirements, execute program strategies, exchange technologies and develop technology strategies, and pursue international business opportunities. Operational initiatives will include the identification and implementation of cost reduction opportunities and quality initiatives.
Executives from Alliant and Raytheon Missile Systems will serve together on a joint management strategy council that will pursue mutually beneficial initiatives, technologies, and business opportunities.
Alliant also said it has signed a separate product agreement with Raytheon for orders that will total at least $235 million. The agreement calls for Alliant's Conventional Munitions Group to supply tactical missile rocket motors and warheads to Raytheon Missile Systems between now and the end of 2007. Raytheon has agreed to place orders of at least $185 million with Alliant during the nine-year period.
Under the product agreement, Alliant will manufacture all solid propulsion rocket motors for the AIM 9M and AIM 9X Sidewinder, AMRAAM, RAM, and Sparrow air-to-air missiles and all warheads for the AMRAAM missile. Production work will be done by the Conventional Munitions Group's Tactical Business unit, which is headquartered at the Allegeny Ballistics Laboratory in Rocket Center, W.Va.
The agreement also calls for Raytheon to award Alliant at least $50 million in contracts for new business programs between 1999 and 2003.
Peter A. Bukowick, president and chief operating officer, said Alliant is very pleased to expand its relationship with Raytheon under the agreements.
"We are very proud to have served Raytheon as a supplier over many years," said Bukowick. "Our new strategic alliance agreement will strengthen and expand that relationship. The alliance will help Alliant provide appropriate technologies, world-class quality, and reliable, repeatable products for major defense programs. It offers Alliant access to the technological and operational resources of one of America's premier defense companies, as well as opportunities for virtually all of our product lines with the exception of large solid rocket motors. It is a win-win situation in every respect -- one that will serve to strengthen the competitiveness of both companies."
Bukowick said Alliant's relationship with Raytheon illustrates clearly Alliant's strategy to be a key supplier to the country's largest aerospace and defense prime contractors.
Raytheon Company, based in Lexington, Mass., is a global technology leader that provides products and services in the areas of commercial and defense electronics, engineering and construction, and business and special mission aircraft. Raytheon has operations throughout the United States and serves customers in more than 80 countries around the world.
Alliant Techsystems is a $1.1 billion aerospace and defense company with approximately 6,300 employees. Headquartered in Hopkins, Minn., the company's business groups are Conventional Munitions, Space and Strategic Systems, and Defense Systems. Company news and information can be found on the Internet at http://www.atk.com/
SOURCE: Alliant Techsystems
Contact: Media, Rod Bitz, 612-931-5413, rod_bitz@atk.com or Investors,
Richard N. Jowett, 612-931-6080, richard_jowett@atk.com, both of Alliant
Techsystems, or Media, Jim Gilkerson of Raytheon Company, 520-794-7477,
jlgilkerson@west.raytheon.com
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