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Originally posted by waynos
I notice that there is also a lot of speculation over a BAE-Boeing merger. I can't get my head around this, would it be a proper 50/50 merger or a takeover by one of the parties? BAE has already bought out chunks of Boeing over the last couple of years, I cannot believe it is going for the rest of it
Would that make mixed fighter forces more likely where the RAF flies BAE Raptors and the USAF flies Boeing Typhoons
My head hurts
LONDON (Reuters) - British defense firm BAE Systems could be set for its boldest U.S. takeover yet, leaving behind a Europe where rival EADS this week was rebuffed by its most likely takeover target, Thales of France.
BAE, Europe's biggest defense player, has shown skepticism about European mergers and on Friday went a step further, saying it wanted to sell its stake in France-based civil airliner maker Airbus. "The biggest question is what BAE buys with its Airbus proceeds," said one London-based aerospace analyst. BAE could pocket $5 billion or more by selling the stake to rival EADS, boosting its war chest for more U.S. takeovers while squeezing that of EADS, whose defense business could use some acquisitions of its own.
EADS put on a brave face, unfazed by the prospect of buying BAE's 20-percent share of Airbus, in which it holds the other 80 percent. "We are not surprised. We are just surprised by the timing," an EADS spokesman said. It was the second time this week that a European rival had turned its back on the Franco-German-Spanish company. On Wednesday, Thales rebuffed calls from EADS to forge a partnership in satellites, sealing a deal instead with French telecoms firm Alcatel. Analysts said the deal hurt chances of EADS taking over Thales in the short term, a move vital for EADS to grow in Europe to counter BAE's U.S.-powered expansion. "The biggest thing that happened this week is that EADS and
Thales didn't merge," said the London-based analyst.
Thales Chief Executive Denis Ranque said the Alcatel deal was not intended to be hostile to EADS, but analysts drew just the opposite conclusion. They saw it as defensive not only for Thales but for the French defense industry. Thales emerged bigger, to better battle Italy's similarly sized Finmeccanica, while Alcatel's increased stake in Thales means it can block EADS from grabbing France's biggest defense player. The national sensitivities mirrored those seen in December, when a Thales bid for German sonar equipment maker Atlas Elektronik was passed over for one from EADS and German steelmaker ThyssenKrupp
"Disposal of Airbus is very much in line with BAE's stated strategy to sell European assets and focus on the more highly rated U.S. defense sector," said Numis Securities analyst Andrew Gollan in a research note.
BAE on Friday denied media speculation about a pending bid for U.S. defense firm L-3 Communications Holdings Inc., yet analysts said there were other possibilities. There have been rumors of BAE buying a large U.S. defense contractor for some years, said Paul Nisbet at JSA Research, which specializes in aerospace stocks. "It would seem that things are wide open. The most available at this point, if they are really going for something big, would be General Dynamics or Raytheon." General Dynamics Corp. is the second-largest supplier to the U.S. Army, making Abrams tanks and Stryker fighting vehicles. It is the Pentagon's fourth-largest supplier overall, building warships and submarines and providing military intelligence systems. It has a market value of about $26 billion. Raytheon Co. makes Tomahawk missiles, Hawker jets and a range of military electronics and is the Pentagon's fifth-largest contractor, with a market value of about $20 billion.BAE's last major move was its purchase of U.S. Bradley fighting vehicle maker United Defense for $4.2 billion in a deal that closed last year.