UPDATE 1-Raytheon wins $1 bln US order for SM-3 missiles

Fri Feb 15, 2008 5:53pm EST

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WASHINGTON Feb 15 (Reuters) - Raytheon Co (RTN.N) has won a $1 billion contract for 75 Standard Missile-3 (SM-3) missiles for the United States and 27 SM-3 missiles for sale to foreign countries, the Pentagon announced on Friday.

It said work on the contract, which runs through February 2012, would also be done by a major subcontractor, Alliant Techsystems (ATK.N).

The Pentagon said fiscal 2007 research and development funding and Japanese foreign military sales funds would be used to pay for the program initially.

The SM-3 Block IA missiles will be used by the U.S. Navy aboard its AEGIS destroyers.

In a separate and unrelated development, the U.S. military announced on Thursday it would use an SM-3 missile -- each of which cost about $10 million -- launched from an AEGIS ship in the Pacific Ocean to shoot down a disabled spy satellite before it enters the atmosphere.

The move is aimed at preventing a potentially deadly leak of toxic gas from the vehicle's fuel tank, officials said. (Reporting by Andrea Shalal-Esa; Editing by Gary Hill; Editing by Andre Grenon)

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