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BAE Systems plans no major revamp after US acquisitions

BAE Systems added 800 employees to its Electronic Systems sector through two recent acquisitions. However, it does not see a need to conduct a major restructuring of the unit, according to an executive at the UK-based defence contractor.

BAE Systems’ US subsidiary is based in Falls Church, Virginia. (JLL)

BAE Systems’ US subsidiary is based in Falls Church, Virginia. (JLL)

“Those two acquisitions fit nice and neatly under the Electronic Systems portfolio,” said Tom Arseneault, the CEO of US subsidiary BAE Systems Inc, which includes the sector. “While there are some lower-level reorganisations that have happened, a little bit of consolidation, that’s the sort of thing we do all the time. At the sector level, no major reorganisation’s needed.”

BAE acquired the Airborne Tactical Radios (ATR) and Military Global Positioning System (GPS) businesses from Raytheon Technologies Corporation for USD2.2 billion last year. The ATR business, which is located in Fort Wayne, Indiana, and Largo, Florida, makes communication systems, while the GPS business, which is based in Cedar Rapids, Iowa, produces secure GPS receivers.

BAE Systems Inc remains open to more acquisitions. “We’re always looking,” Arseneault told Janes in an interview. “It’s a continual process. We’re always on the lookout for everything from smaller technology bolt-on opportunities, which we’ll do from time to time, up through and including acquisitions” of the magnitude of the Raytheon deals.

Arseneault said the US subsidiary’s acquisition and investment decisions are guided by the 2018 US National Defense Strategy, which calls for improvements in areas such as interoperability, precision, readiness, resilience, and speed. The Biden administration’s upcoming fiscal year 2022 budget request “will be a signal as well as to how those priorities are translating into budget decisions”, he said.

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