Carlyle Among Firms in Hunt for Raytheon Unit-Source

NEW YORK (Reuters) - Carlyle Group is among the private equity firms bidding for defense contractor Raytheon Co.'s RTN.N commercial aircraft unit, according to a source familiar with the matter, in a deal that could fetch around $3 billion.

Private equity firm Cerberus Capital Management and Canadian conglomerate Onex Corp. OCX.TO are believed to be the other finalists in the auction, the source said.

A decision on the deal is expected to come before the end of the year, according to the source, with estimated price tags on the offer expected to come in around $3 billion.

Raytheon, Cerberus and Onex did not return calls seeking comment. Carlyle declined to comment.

Waltham, Massachusetts-based Raytheon put the unit, known as Raytheon Aircraft Co., up for sale in July, hiring investment bank Credit Suisse Group CSGN.VX to run the process.

Raytheon Aircraft Co., which makes jets under the Beechcraft and Hawker names, has been lagging competitors recently and falling behind Raytheon’s more profitable defense operations.

Raytheon said at the time that it was considering several strategic alternatives for Raytheon Aircraft: set up a potentially multibillion-dollar sale; spin the division off; or do an initial public offering.

The Wichita, Kansas-based unit, which traces its roots back more than 70 years to the founding of the Beech Aircraft Corp. in 1932, had $2.9 billion in sales last year, but is no longer a market leader.

Raytheon Aircraft competes directly with General Dynamics GD.N Corp.'s Gulfstream unit, Textron Inc.'s TXT.N Cessna unit and Canada's Bombardier Inc BBDb.TO, which makes Lear jets.

Additional reporting by Bill Rigby