European missile manufacturers announce merger at last and look to Diehl for further consolidation
After years of talks, Europe’s two big missile houses, MBDA and LFK, finally declared their merger at Paris, with the new company setting its sights on further consolidation with the missile arm of Germany’s Diehl.
The merger – which will be formally completed by year-end – had been bogged down in negotiations over the value of the German company between LFK majority owner EADS and MBDA, in which EADS has a 37% stake. MBDA says the German air force’s decision to order LFK’s Taurus air-to-ground missile and this month’s signing for Lockheed Martin-led MEADS missile system development, in which EADS and LFK are partners, were the catalysts to signing the deal, financial aspects of which are not being disclosed.
Under the merger terms, MBDA – in which the UK’s BAE Systems and Italy’s Finmeccanica have 37% and 25% stakes respectively – will acquire the shares of LFK, which is owned 81% by EADS and 19% by MBDA. The shareholder split in MBDA will stay the same.
Europe’s until-now convoluted missile house landscape could be further simplified if MBDA goes ahead with a partnership with Diehl’s missile arm BGT to create an “MBDA Deutchland”. EADS already owns a 13% stake in the business, but sensitivities within German government and complications from the fact that Diehl is a private company are thought likely to prevent a full-scale merger.
Tom Enders, chief executive of EADS’s Defence and Security Systems division, says the integration of LFK is an “important step to consolidating the missile market”. He adds: “We would like to pursue consolidation with the Diehl business. I can confirm that this is on our roadmap still to be done.”
Source: Flight International