Douglas Barrie/LONDON

THE GERMAN Government is trying to use German and UK requirements for a future beyond-visual-range air-to-air missile (AAM) as leverage in consolidating European missile- manufacturing capacity.

German political and industrial sources say that the Government is now encouraging Daimler-Benz Aerospace (DASA) to widen its tie-up with Matra of France to offer the Future Advanced Medium Range Air-to-Air Missile to include British Aerospace.

Royal Air Force Staff Requirement (Air) 1239 is for a next-generation AAM for the Eurofighter EF2000. The German air force is believed to have a similar requirement.

Hughes, teamed with Aerospatiale, Thomson-Thorn and Shorts, will offer a ramjet-powered derivative of its AIM-120 Advanced Medium-Range Air-to-Air Missile.

BAe will also bid, as will Matra and DASA. What has yet to be finally resolved is whether they will make a joint bid when proposals are submitted in June. Negotiations to settle this issue are understood to be almost complete.

A joint bid would derive economies of scale from what would effectively be a UK/German procurement programme.

To date, BAe has been involved in a joint bid with GEC-Marconi and Saab Missiles, and is also being wooed by Hughes.

Independently of SR(A)1239, BAe and Matra are continuing to negotiate a merger, of their respective missile divisions. BAe maintains that, despite the repeated delays, stretching back two years, the merger will go ahead.

Both companies have had to restart the valuation process because of their changing fortunes since the deal was agreed. BAe Defence chairman John Weston admits that the companies have had to go back to scratch over the valuations. The two companies now expect to conclude the merger before September.

Meanwhile, DASA is in the due-diligence process over a proposed merger of its missile business with Aerospatiale. Again, the aim is to conclude the deal in the third quarter of 1996. Matra has expressed an interest in acquiring Aerospatiale's missile operations, if the state-owned company is divided as part of the proposed merger with Dassault Aviation.

Some German sources view the creation of the two merged groups as an interim step toward establishing a single large European missile-manufacturing company with the "critical mass" to engage US firms on near-equal terms.

Source: Flight International