Chris Jasper and Stewart Penney/LONDON
British Aerospace and Finmeccanica are to create a European defence electronics business from Alenia Marconi Systems (AMS). AMS is a joint venture between the Italian conglomerate's Alenia Difesa company and Marconi Electronic Systems (MES), with which BAe is merging.
The breakthrough agreement, first mooted in Flight International (6-12 October), came in the same week that European manufacturing capabilities in missiles and space were also consolidated. This advances the process of "bottom-up" sectoral consolidation just days after the "top-down" merger of Aerospatiale Matra and DaimlerChrysler Aerospace (Dasa) to form the European Aeronautics, Defense and Space Company (EADS).
The two entities will create three main groups:
• Electronic systems: Alenia Marconi Systems, which specialises in naval/land-based radar, command and control systems (C2), simulation and training, and air traffic control systems will be merged (minus its missiles business) with BAe's Land and Sea Systems division. The latter was acquired from Siemens Plessey last year and specialises in radars and C2, as well as tactical communications. The entity will have sales of about $1.1 billion and will be 50:50-owned by BAe and Finmeccanica.
• Missiles: Matra BAe Dynamics, 50:50-owned by the UK company and Aerospatiale Matra, will merge with the missiles and missile systems businesses of AMS (the Marte air-to-surface missile and work on Meteor and the Aster surface-to-air missile), and with Aerospatiale Matra Missiles. BAe and Aerospatiale Matra will each control 37.5% of the new company, with Finmeccanica, which must make a cash contribution, holding 25%.
The business will rank second in the world after Raytheon, with annual sales of $2.7 billion, compared with the US company's $5.6 billion of missile sales. MBD chief executive Fabrice Bregier heads the new entity.
A fourth missiles business, LFK (30%-owned BAe and 70% by Dasa and hence EADS), is to be added to the new company soon, while the Saab Dynamics missiles operation (35%-owned by BAe) could also be brought in.
• Space: Matra Marconi Space, a joint venture between Aerospatiale Matra and MES, is to be merged with Dasa's space activities (space infrastructure and satellites) under the name Astrium. The new company, which will have annual sales of $2.45 billion, is to absorb Finmeccanica's Alenia Spazio.
Following the EADS deal, BAe has again stated that the company has no plans to dispose of its 20% stake in Airbus but dismisses claims that the UK Government has threatened to use its golden share to veto such a move.
Source: Flight International
