Finmeccanica Signs Major American Deals

Most European defense budgets are currently stable or declining, despite an atmosphere of stepped up operations abroad. Unsurprisingly, many European defense firms are embarking on a globalization strategy in an effort to broaden their markets. EADS’ light helicopter and aerial refueling wins recently allowed it to begin to match the transatlantic foothold of Britain’s BAE Systems. Now Italian defense conglomerate Finmeccanica has joined the mix, with a pair of deals: a $5.2 billion acquisition of DRS that shows some upside from the Euro’s problematic strength, and an agreement that deepens cooperation and joint marketing with Boeing in the aviation field. The DRS Acquisition Finmeccanica’s pursuit of DRS Technologies had not been a secret, and the Franco-German defense giant EADS had also expressed interest. On May 12/08, Finmeccanica S.p.A. [Milan: FNC] and mid-tier integrated defense electronics firm DRS Technologies, Inc. [NYSE: DRS] signed a definitive merger agreement. Finmeccanica will acquire 100% of DRS stock for $81 per share in cash, a transaction, valued at approximately $5.2 billion/ EUR 3.4 billion, inclusive of approximately $1.2 billion in net debt. This represented a 27% premium to DRS’ closing share price on May 7/08, and a a 32% premium over DRS’ 30-day average stock […]