Non-Subscriber Extract
BAE Systems moves to take over Armor Holdings
By Guy Anderson
08 May 2007
BAE Systems has announced that it is looking to acquire US armour systems specialist Armor Holdings in a USD4.53 billion deal: an acquisition that would strengthen the UK group's position both in land systems globally and in the key North American market.
The definitive merger agreement which was announced on 8 May but remains subject to the approval of Armor shareholders will see BAE Systems offer USD88 per share, valuing the company at USD4.14 billion. The assumption of Armor's net debt of USD388 million brings the total value up to USD4.53 billion.
Such a deal would follow the June 2005 purchase of US land systems specialist United Defense: a USD4.2 billion transaction that catapulted BAE Systems into the top 10 of US contractors and relegated the UK Ministry of Defence to second place as BAE Systems' most significant customer. The agreement - then the largest since BAE Systems' formation in 1999 - also consolidated the UK group's position as the second-largest land systems supplier in the world.
Jane's comment
BAE Systems has positioned itself to take advantage of merger and acquisition opportunities in core markets, having completed a number of significant disposals in 2006. Most notably, the sale of its 20 per cent stake in Airbus to majority shareholder EADS raised USD3.5 billion.