New York, USA – Boeing, the aerospace giant, has sold Digital Receiver Technology, a subsidiary that makes wireless surveillance equipment, to Thales Defense & Security. It marks the latest play by Boeing as the company tries to curb its costs and stabilize its financial standing through strategic efforts.
A Strategic Sale for Financial Recovery
The company confirmed today that Digital Receiver Technology, a Maryland-based unit that provides critical surveillance tools to the U.S. military and intelligence agencies, will now be operated under Europe’s leading defense electronics firm, Thales, after announcing Sunday the sale. Boeing wouldn’t disclose the financial terms of the sale but said it reflects an ongoing effort by the company to offload non-core assets and bolster liquidity in a continuing battle to stay aloft financially.
Boeing’s Strategy Shift
The company, upon taking its exploration of asset sales to contend with financial troubles, debt-related and operational setbacks, has started selling assets as small as defense units in order to have more focus on core portfolios, which include commercial aviation, space, and military aircraft programs.
One of the units meant to add to the company’s growth DRT an acquisition Boeing made in 2008 to enhance its presence in the intelligence market, has instead become one of the divisions being targeted for divestment. Its sale would be consistent with Boeing’s plan of downsizing its defense portfolio to build financial stability.
Thales’ Expansion in U.S. Market
DRT acquisition will enable Thales Defense & Security to maximize their market penetration into the surveillance and intelligence technology market. The deal marks further step by Thales in its steps for the expansion of its business in the United States as supplementary to the existing portfolio, improving defense electronics businesses worldwide.
This acquisition will add value to Thales since it will be in a position to extend its capabilities that help support US defense initiatives by assistance from DRT’s experience in wireless surveillance equipment in responding to modern requirements in intelligence operations.
A Tactical Win for Both Companies
Both firms gain: Boeing gains much-needed capital and a firmer reinforcement of its core business; Thales strengthens its U.S. defense capabilities. Yet in attempting to regain its financial footing, the sale of DRT can be viewed as part of a more holistic strategic consolidation for Boeing. It means that Thales is on an upward curve with respect to defense electronics, outstepping and outproducing rivals in surveillance technology.
