Both BAE Systems and EADS have confirmed that BAE has initiated a discussion on the potential disposal of BAE Systems’ 20% stake in Airbus.” Negotiations were described as being in “the very early stages”; BAE’s 20% holding is valued at EUR 3.5 billion ($4.3 billion) in EADS’s books, but The Scotsman newspaper noted that analysts expect any sale to be worth GBP 3.0-4.5 billion ($5.2-7.8 billion at current conversion). EADS adds that the initiation of these discussions does not represent an exercise of the put option held by BAE Systems in relation to this stake.
More details regarding the potential deal, its military procurement significance, and some analysis regarding both its strategic implications and BAE’s future options can be found below… along with updates as the deal progresses.
EADS’s two biggest corporate shareholders, DaimlerChrysler and Lagardere SCA, announced on April 4, 2006 that they’re each selling 7.5% stakes in EADS in simultaneous transactions. Bloomberg reports that the transaction is valued by sale managers JP Morgan Chase & Co. and Morgan Stanley at about EUR 2.5 billion ($3.02 billion at current conversion).
Northrop Grumman announced that it has completed the successful integration of new target detection, acquisition and tracking capabilities into all 189 previously fielded U.S. LITENING pods on the AV-8B, A-10, B-52, F-15E, F-16 and F/A-18 aircraft, raising them all to the current LITENING AT (Advanced Targeting) standard. See DID’s article highlighting the LITENING Pod.
LITENING has an open architecture and spare volume, which makes upgrades easier and more affordable. Additional upgrades contemplated to the LITENING pod include improved data links which are currently being provided to multiple customers. The USAF continues to conduct tests and designate improvements; advanced sensor capabilities currently in development include ROVER compatibility for tactical air controllers, extended range identification, additional enhanced imaging techniques, and advanced networking capabilities. See all of DID’s LITENING-related coverage.
Raytheon Solipsys Corp. in Laurel, MD received a cost-plus-award-fee contract for engineering and technical support related to data distribution system and range mission tool software upgrades to the Pacific Missile Range Facility at Barking Sands, Kekeha, HI. The total estimated value of the contract is $28.1 million. Work will be performed on the island of Kauai, HI and the period of performance is from April 2006 to September 2010. The Naval Sea Systems Command, Washington, DC issued the contract (N00024-06-C-6101).
The Headquarters Ogden Air Logistics Center at Hill Air Force Base, UT issued a pair of firm-fixed-priced indefinite-delivery/ indefinite-quantity contracts for repair services to F-16 Wide Angle Conventional Heads-Up Displays (HUD), HUD Electronic Units, F-16 Defractive Optical Holographic HUDs and related components. Solicitation began December 16, 2005; the contracts total $39 million over a period of five years; work will be complete April 2011.
International Enterprises Inc. in Talladega, AL received a $25.3 million contract (FA8212-06-D-0004), while BAE Systems Integrated Defense Solutions in Austin, TX received a $13.7 million contract (FA8212-06-D-0005).
The US military’s DISN backbone uses bulk-rate leased, high-speed transmission mediums (T1 and T3 channels) and GFE smart (computerized) multiplexers which provide advance dynamic bandwidth allocation services. In addition to cost savings over equivalent commercial grade services, DISN circuits provide customers a specialized 24/7 network control center for monitoring and trouble reporting activated DISN circuits.
MCI Telecommunications Corp. (doing business as Verizon) recently received a $6.6 million indefinite-delivery/ indefinite-quantity contract, which will be funded using defense working capital funds. This modification is based on firm-fixed pricing to extend the DISN Switched/Bandwidth Manager Services – CONUS (DS/BMS-C) contract to February 27, 2007. The DS/BMS-C contract needs to remain in place until the completion of transition of all circuits to the new DISN transmission services – CONUS access optimization (DTS-C A/O) contract, which will be used to move approximately 3,200 circuits off of the 35 MCI bandwidth managers to AT&T owned aggregation nodes (see PDF announcement). The requirement was solicited as other than full and open competition basis, and only one proposal was received. The Defense Information Technology Contracting Organization at Scott Air Force Base, IL issued the contract (DCA200-96-D-0096). Note that CONUS = CONtinental United States.