British, French Firms Clear Guided-Weapons Venture
May 01, 2011
LONDON -- British Aerospace PLC and Matra Hachette SA, a subsidiary of Lagardere Group of France, gave final approval to a joint venture that will create Europe's largest guided-weapons business, marking an important transition in the painful reorganization of the continent's bloated defense sector. Matra BAe Dynamics, as the new unit will be known, will be equally owned by the two partners. BAe said it expects annual sales of about one billion pounds ($1.55 billion). The linkup, which had been discussed for about three years, was finally sealed last month when the British government awarded the consortium a 650-million-pound order for a series of missile contracts. The transaction will be financed by an initial cash payment of 80 million pounds by BAe to Lagardere, but that figure could be adjusted to reflect the number of orders each partner receives. The deal, which will create the world's third-largest maker of tactical missiles after General Motors Corp.'s Hughes Missiles Systems Co. and Raytheon Co., both of the U.S., is still subject to government and regulatory approval.
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