Graham Warwick/WASHINGTON DC
BAE Systems is to sell its majority shareholding in BAE Systems Canada to Canadian investment partnership Oncap. Montreal-based Oncap has agreed to buy BAE's 54% stake in the former Canadian Marconi for C$594 million ($400 million).
If the sale of the majority stake is not completed, Oncap has the fall-back option of buying 49% of BAE Systems Canada from the UK firm.
Oncap is a C$400 million investment partnership formed in December by several Canadian pension funds and financial institutions and Onex, the investment firm which last year made an unsuccessful C$2.4 billion bid for Air Canada and Canadian Airlines.
BAE acquired control of Canadian Marconi when it merged with the UK's GEC-Marconi Electronics in 1999.
The Toronto-based company, with C$300 million in annual sales, specialises in avionics and flight management systems, global positioning system receivers and satellite communications antennas, mainly for commercial customers.
As such, it does not fit within BAE's core defence aerospace business. A recent move for the company has been into in-flight entertainment, where it is a partner in the AirTV consortium, which is developing live television, internet and e-mail services, in competition with Boeing's Connexion.
Oncap, set up to invest in small and medium-sized North American companies in partnership with their management teams, "is committed to implementing strategic growth initiatives for the company", says BAE Systems Canada president Jim Close, and provide "support and focus".
Source: Flight International
