Non-Subscriber Extract
Cost is putting US acquisitions beyond European reach, says analyst
By Keri Smith
09 January 2008
European defence companies are keen to look to the United States for further growth but the cost is too high, a leading London-based defence analyst has told Jane's.
The analyst - who spoke to Jane's on 8 January on the condition of anonymity - made his comments following significant mergers and acquisitions (M&A) activity in the sector in the final months of 2007.
Discussing further purchasing opportunities in Europe and the US in 2008, the source said: "Finmeccanica has said, since time and memorial, that it wants to do a deal in the US, while there were reports last year that EADS wanted to buy a US company but it was vetoed by the shareholders."
Jane's recently reported that EADS plans to make acquisitions across the Atlantic and it has been suggested that low-profile acquisitions would be the natural path for the pan-European group to take in order to increase its presence in the US defence market.
"Europe is keen to look to the US, but the multiples are too high, although BAE Systems is a perennial US acquirer," said the analyst, who cited "heavy US competition" with UK companies.