BAE Closes United Defense LP Acquisition
On June 24/05, the U.S. Department of Justice granted termination of the Hart-Scott-Rodino Act waiting period with respect to the proposed acquisition of United Defense Industries, Inc. (NYSE:UDI) by BAE Systems, Inc., the North American subsidiary of BAE Systems plc. The Carlyle Group had owned 49.5% of United Defense.
With that obstacle removed, the $4.2 billion deal, which was reported here on DID back in March 2005, formally closed on June 24, 2005. London-based BAE Systems says it will merge its existing land systems divisions in the U.K, Sweden (Bofors Defence), and South Africa with UDI. The newly formed BAE Systems Land and Armaments will be headquartered in Arlington, VA and will be led by CEO Thomas W. Rabaut.
DID covered the initial takeover announcement of UDI on March 7, 2005. Acquiring a large firm like UDI, that that makes combat vehicles and missile launchers for the U.S. military, is widely seen as as part of a move by BAE to expand its lead over European rivals in the U.S. market. This acquisition added 11,000 employees to the BAE Systems payroll, now 35,000 people worldwide. It also elevates BAE Systems to the Pentagon’s sixth-largest contractor, and makes the company the second-largest maker of armored vehicles behind Falls Church, VA-based General Dynamics.
BAE Systems now makes a wide range of products for the U.S. military, including armored systems like the M113 armored personnel carrier, M2/M3 Bradley Infantry Fighting Vehicle, AAV7 Amphibious Assault Vehicle, and M109 self-propelled howitzer; various components of the USA’s proposed Future Combat Systems vehicle fleet; and Naval guns and launchers. Various Bofors Defence and FNSS products round out their range.
According to BAE Systems’ 2004 Annual Report, its North America sales were $2.77 billion. UDI’s 2004 revenues, meanwhile, were $2.29 billion.
Sources and Additional Readings
- Corp. Release (June 24/05) – BAE Systems News Release Acquisition of United Defense by BAE Systems Cleared by Department of Justice; Closing Expected June 24, 2005
- Corp. Release (June 24/05) – BAE Systems Completes Acquisition of United Defense Industries; Creates Global Land Systems Enterprise
- BizJournal (June 24/05) – UDI becomes BAE Systems Land and Armaments
- DID (March 7/05) – BAE Buys Bradley’s Builder for $4B