DEFENSE

General Dynamics Wins Australian Contract

General Dynamics won an order from Australia's defense ministry for up to $608 million, with an initial $74 million phase, to develop a communications system for sharing battlefield information between army and air force units. The Falls Church defense contractor formed a subsidiary, General Dynamics Systems Australia, to work with Australian partners ADI and Tenix Defence.

MERGERS & ACQUISITIONS

E-Trade Agrees to Buy BrownCo

Discount brokerage E-Trade Financial agreed to buy J.P. Morgan Chase's BrownCo for $1.6 billion in cash.

The purchase gives E-Trade 200,000 new customers with an average balance of more than $145,000, the company said. That's more than quadruple E-Trade's current average, $33,400. The company, based in New York but with major operations in Arlington, will double its portfolio of margin loans, used by customers for trading, to $6.2 billion.

BrownCo's customers generate six times as much profit as E-Trade's, which will help the company reduce its reliance on commissions, which have tumbled since the collapse of the Internet stock boom. Wealthier clients trade more frequently and use more margin loans.

REAL ESTATE

Some Markets Overheated, Freddie Chief Says

Home prices in some U.S. regions, which have more than doubled in the past five years, are too high and may decline, putting a drag on the nation's economy, Freddie Mac chief executive Richard F. Syron said. "There are enough local markets that have seen an excess of exuberance that when you combine them, they will have some dampening effect -- I'm not saying recession -- on national economic activity," he said in remarks to the Chief Executives' Club of Boston.

BIOTECHNOLOGY

Avalon Completes $28.9 Million IPO

Germantown-based Avalon Pharmaceuticals sold 2.75 million common shares at $10.50 a share in an initial public offering, but the stock fell 9.6 percent in the first day of trading to close at $9.49.

Compiled from staff and news service reports.