11 March 2005
11 March 2005
The wholly-owned U.S. subsidiary of BAE Systems plc, BAE Systems North America Inc. has entered into a definitive merger agreement to acquire United Defense Industries, Inc (UDI) for over 2 billion pounds (GBP).
The agreement, the largest in BAE’s history, will make BAE Systems the sixth largest defence company in the US. The deal also represents the largest ever acquisition of a US defence company by a non-US company, potentiall strengthening BAE's position in winning defence global contracts with the Pentagon.
UDI, the leading U.S. defence company which generated annual sales in 2004 of $2,292 million, designs, develops and produces combat vehicles, artillery systems, naval guns, missile launchers and precision munitions. All of such equipment are used by the U.S. Department of Defence and allies worldwide, and provides non-nuclear ship repair, modernization and conversion to the U.S. Navy and other U.S. Government agencies. UDI employs approximately 8,000 people in 25 locations in the U.S. and Sweden.
The Proposed Acquisition will be seen as a significant step in the delivery of BAE Systems’ strategy to grow as the premier transatlantic aerospace and defence contractor by expanding and developing its business in North America; creating a global land systems business and developing its worldwide through-life support and services capabilities.
UDI, together with BAE Systems’ existing UK and Swedish land systems businesses, will form part of a newly created global land systems business, which will be headquartered and led in the U.S., as part of BAE Systems North America, by the experienced UDI management team.
A press statement by BAE Systems concerning the deal stated that “the combined business creates a leading international position in the fast growing land systems sector. As a result of the global war on terror and ongoing operations in Iraq and Afghanistan, the U.S. Department of Defense has significantly shifted its priorities and budget towards land systems”.
Commenting on the Proposed Acquisition, Mike Turner, Chief Executive of BAE Systems, Said “UDI is a strong business with an excellent track record, outstanding growth prospects and a highly regarded management team. By combining UDI with BAE Systems’ existing land systems and North American operations, our capabilities will be strengthened to the benefit of current and future U.S. Department of Defense, UK and Swedish Ministries of Defense programs and their respective armed forces. This global land systems business will also build on its existing strong position in export markets.”
The Proposed Acquisition is conditional upon receiving the required regulatory clearances, UDI shareholder approval and the approval of BAE Systems shareholders at an Extraordinary General Meeting and is expected to close by mid 2005. The Proposed Acquisition will be financed through a combination of a cash placing of new equity, a new debt facility and existing internal resources. The Placing, which is being launched today, is not conditional upon the completion of the Proposed Acquisition.
Mark Ronald, President and CEO of BAE Systems North America, added that “the combination of UDI with our existing land systems and U.S. operations will create a world class business, better able to meet the ever more demanding requirements of our military customers with innovative capabilities, products and solutions. BAE Systems North America has a demonstrable track record of excellent stewardship of its acquired U.S. businesses, having increased investment, grown jobs, improved performance and consistently achieved double digit annual growth. We look forward to welcoming UDI’s management team and employees into BAE Systems North America. Culturally, it’s a great match – BAE Systems and UDI have common values and a similar heritage, with long histories of innovation and commitment to national security.”
Thai Flight Training (TFT), a subsidiary of Thai Airways, recently ordered an Airbus A320 door trainer from Spatial Composite Solutions.
NTPT is collaborating with the Ecole polytechnique fédérale de Lausanne - Swiss Centre of Technology (EPFL) and other partners to research discontinuous fibre composite tubes for high performance applications.
Gulf Aviation Academy (GAA) recently ordered a Boeing 787 door trainer from Spatial Composite Solutions, complete with Spatial’s virtual slide trainer.