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GENERAL DYNAMICS EXPANDS ITS IT DIVISION

13 & 14 Dec. General Dynamics Corp. announced two acquisitions to expand its burgeoning IT Division. On Wednesday it agreed to buy Anteon International Corp. for about $2.1 billion in cash, in a move to expand its technology, training and engineering services to the U.S. military.

Under the deal, General Dynamics is to pay $55.50 per share for Anteon, or $2.1 billion overall, and assume about $100 million of Anteon debt. The price represents a premium of more than 36 percent over Anteon’s closing price Tuesday of $40.77 on the New York Stock Exchange. The deal should immediately add to earnings, General Dynamics said, and is set to close in the second quarter of next year. In premarket trading Anteon shares rose 33 percent to $54.35 on the Inet electronic brokerage system. General Dynamics shares were untraded.

On Tuesday, General Dynamics entered into a definitive agreement to acquire FC Business Systems, Inc., a privately held information technology (IT) services firm headquartered in Fairfax, Va. The acquisition, approved by the boards of both companies, will be immediately accretive to General Dynamics. Terms were not disclosed. Subject to normal regulatory approvals, the transaction is expected to close by the end of the first quarter of 2006. FC Business Systems, with anticipated 2005 sales of approx. $150m, is a leading engineering and IT services company that offers a full spectrum of IT services to a wide variety of government customers. The company has extensive credentials in enterprise network services, including information assurance and information security; network engineering; and software application development and integration. The company has approx. 1,000 employees, more than 50 percent of whom hold national security clearances. FC Business Systems will become part of the General Dynamics Network Systems business unit, a world-class IT solutions provider and integrator of converged enterprise and wireless networks

These acquisitions expand GD’s expertise in IT services and pouts the company in a position to bid for a number of key projects expected in 2006 in the defense and homeland security areas.

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