THE Boeing Co took a giant step towards becoming the world's dominant aerospace company yesterday when it agreed to acquire Rockwell International Corp's space and defence businesses for $3.2 billion (£1.98 billion).

Boeing - the world's biggest commercial airplane maker - and Rockwell, which built the US space shuttles and played a major role in the Apollo moon missions, announced an agreement under which Boeing will acquire Rockwell's space and defence units for a combination of stock and the assumption of debt and other obligations.

Under the agreement, Boeing will issue about $860 million of its common stock and retain $2.165 billion of Rockwell debt and assume certain pension obligations of Rockwell.