WASHINGTON (Reuters) - William Swanson, chief executive of Raytheon Co (RTN.N), said a possible merger of European defense giants EADS EAD.PA and BAE Systems (BAES.L) could help his own company boost its share of important defense markets.
Swanson, who helped Raytheon integrate its own complex acquisitions during the last big wave of consolidation in the 1990s, told a Morgan Stanley investor conference on Thursday that it was hard work merging separate entities like those of EADS and BAE.
“We’ll probably increase Raytheon’s market share,” he said, adding, “When you put companies together in a contracting marketplace, your team has their head down, trying to figure out how to make things work rather than looking up and figuring out how to make an opportunity out of the situation.”
With EADS and BAE occupied with the merger, Raytheon could see some additional opportunities to win orders, Swanson said.
He said it would be critical for EADS and BAE to truly integrate the two businesses, or risk losing out on the expected synergies and improved profit margins.
“Those kinds of mergers are extremely difficult. You better really understand the synergies and you want to really understand what the margin implications are as you’re putting it together,” he added.
For its part, Raytheon remains focused on executing on its contracts, driving costs lower and responding quickly to the needs of its customers, Swanson said.
Reporting by Andrea Shalal-Esa; Editing by Leslie Adler