PARIS and LEXINGTON, Mass., Dec. 15 /PRNewswire/ -- Raytheon Company
(NYSE: RTNA, RTNB) and Thales (formerly Thomson-CSF) have entered into an
agreement to form an equally owned transatlantic joint venture encompassing
air defense/command and control centers and ground-based air surveillance and
weapons-locating radars.  The air traffic management (ATM) businesses of both
companies are not included in the joint venture and will continue to compete
in the ATM marketplace.
    The new enterprise will have operating subsidiaries in Fullerton, Calif.,
and in the greater Paris metropolitan area.  It will have about 1,300
employees worldwide and pro forma revenues of approximately $500 million to
$700 million (600 million to 750 million euros).
    The transaction is subject to approval by the Committee on Foreign
Investment in the United States and by relevant authorities, notably the
French government.  The transaction must also be approved by the appropriate
antitrust enforcement agencies.  The two companies expect the joint venture,
to be known as Thales Raytheon Systems, to begin operations in the first
quarter 2001.
    Raytheon and Thales officials expect the new alliance to result in major
benefits for their customers. The new joint venture will:
    -- Offer total solutions to air defense command and control and
battlefield radar requirements by combining complementary products.
    -- Bring together the resources of Raytheon and Thales to build on a broad
set of existing customer relations to offer market solutions at a competitive
price.
    -- Serve to reinforce operational alliances between U.S. and European
armed forces by providing fully interoperable products.
    Raytheon Chairman and Chief Executive Officer Daniel P. Burnham said,
"This joint venture will provide reciprocal transatlantic market access. Both
Thales and Raytheon have accomplished histories of success in Air Defense/C2
and ground-based radar. We believe that by combining our complementary
businesses in these areas, we will be able to extend our global reach while
serving our customers more effectively."
    Denis Ranque, Thales Chairman and Chief Executive Officer, said, "This new
company constitutes the first transatlantic initiative to build up a
structural alliance in the defense sector. Through this very innovative
concept, Thales Raytheon Systems will compete more effectively in the global
marketplace."
    Command and control systems for air operations and battlefield air defense
provide protection against air threats. They include surveillance radars and
command and control centers to identify approaching targets, initiate
defensive measures as appropriate, and plan and prepare offensive missions
over a specified area. Such systems are linked to airborne sensors, surface-
to-air missiles, air bases or batallions.

    Note to the editors:
    Raytheon and Thales will host a media conference call at 10:00 a.m. EST,
4:00 p.m. European Time, to provide additional information and answer
questions.  Representatives from both companies will conduct the call. Members
of the media who wish to participate should call (212) 896-6165 by 9:45 a.m.
EST.  International callers may join by calling (212) 676-5255 by 3:45 p.m.
European Time.
    A replay of the conference call will be available from 1:00 p.m. EST on
Friday, Dec. 15, 2000, until Noon on Friday, Dec. 22, 2000.  The replay number
is (800) 633-8284, and the reservation number is 17301756.  The post view
number for international callers is (858) 812-6440 and the reservation number
is 17301756.

    Contacts:
    Raytheon Company (U.S.) - Dave Shea, 781.860.2386
    Raytheon Company (Europe, Middle-East, Africa) - Paul E. Stefens
    32.2.778.49.55
    Thales - Matt Pothecary, 33.1.53.77.8626

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