British Aerospace and Daimler-Benz Aerospace (Dasa) have emerged as winners in the long-running battle to take over the Siemens Defence Electronics division, marking another step in an increasingly rapid consolidation within the sector in Europe.
The Siemens business, which has sales of nearly DM1.2 billion ($685 million) and employs around 3,800 people, was also being pursued by Thomson-CSF and GEC, although the UK group ruled itself out of the competition in mid-September on grounds of the price being asked.
BAe says that it will pay DM929 million for its share of the deal, taking over Siemens Plessey Systems (SPS), which includes air-defence radar and electronic-warfare technology in the UK, and also Siemens Plessey Electronic Systems Australia (SPESA). The units last year posted sales of around DM630 million and an order backlog of close to DM1 billion, including SPS' 30%share in the Archer consortium selected to develop the Bowman communications system for the UK armed forces.
BAe plans to make SPS the core of a new Defence Systems business unit, which will include the Anglo-French SEMA software house and STN Atlas, jointly owned with Germany's Rheinmetall. The unit will also incorporate the SIKA consortium, which BAe set up together with Lockheed Martin and Vickers to bid for the prime contract in a new Anglo-American battlefield scout vehicle project.
Dasa will take over the radar, command and control activities at the Munich-Unterschleissheim site. This will eventually be absorbed into the group's Defence and Civil Systems division, which has sales of DM2.7 billion and employs around 8,500 people at its main plants in Friedrichshafen and Ulm. Dasa declines to reveal a figure, although sources close to the deal say that the price was around DM300 million.
Sources close to the negotiations say that the final contract was to have been signed on 24 October, after a week of fraught negotiations over the remaining barriers to a sale. Rival bidder Thomson-CSF had effectively dropped out of the contest by mid-October, after opposition in the UK and Germany to its bid.
The sources add that the final agreement with BAe and Dasa was delayed by legal wrangles over the wording of the contract and about whether the deal should include the Belgian plant in Oostkamp, which neither buyer was keen to take on. The plant was finally excluded, although it is understood that a compromise was reached by awarding the operation a five-year supply contract to the division.
Also excluded was Siemens' Air Traffic Management division, spun off into Airsys ATM, a joint venture with Thomson-CSF, this year.
Source: Flight International
