Posted on 03/06/2005 10:48:13 PM PST by neverdem
BAE Systems, the British military contractor, reached a deal to acquire United Defense Industries for about $4 billion last night, according to executives close to the deal.
United Defense, maker of the Bradley Fighting Vehicle, had been put up for auction several months ago, the executives said. BAE appears to have beaten several other rivals, including Northrop Grumman, for control of United Defense.
The deal is expected to be announced today, the executives said.
Such a combination would further accelerate trans-Atlantic alliances between United States and British military contractors. BAE Systems already has an $18.9 billion partnership with Lockheed Martin and Northrop Grumman on the first phase of the military aircraft known as the Joint Strike Fighter.
That deal may be worth many times that sum, as the market for the fighter among American and British military forces may run to several thousand aircraft with additional military markets in at least seven other countries.
BAE's United States division, BAE Systems North America, is a major supplier of electronics and information technology to the Pentagon, employing about 30,000 people in 30 states, and Britain, with annual sales of more than $5 billion. Worldwide, the parent, employs more than 90,000 and had sales in 2003 of £12.6 billion ($24.2 billion).
BAE Systems also has major contracts in the United States Army's $127 billion Future Combat Systems program, which aims to create a computer-driven 21st-century Army.
United Defense Industries Inc., based in Arlington, Va., a maker of Army vehicles and naval guns, had sales in 2004 of $2.3 billion and has been making armored vehicles since World War II. In May 2002, its $11 billion Crusader cannon program was canceled by the Pentagon.
United Defense is 49 percent owned by the Carlyle Group, a Washington-based private equity firm.
A spokesman for United Defense declined to comment last night; a spokesman for BAE could not be reached.
BAE systems has stated that they wont sell anything to China.
No, but they will move the factories there.
I would of prefered that Northrop Grumman bought the company, but BAE isn't going to give up $20 billion in American contracts for China.
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