Thursday, April 07, 2005

European defense industry mergers ahead A recent BusinessWeek article ("Taking aim, again". 3/3/2005) foresees further consolidation in eh European defense industry as a continuation of some recent moves. The problem is that smaller, national European companies have had problems competing against larger America firms. In fact, the most successful European company in the field is EADS, the result of the merger of German (DASA) and French (Aerospatiale Matra) companies, with interests both in military and civilian aviation. EADS makes the Airbus, Boeing's only competitor in commercial avionics, in cooperation with British company BAE). Other recent moves in the industry have included the takeover of British Westdale, a helicopter maker, by Italy's Finmeccanica last year. There was also the combination of French defense electronics company Thales with British Racal. French defense and aerospace companies SNECMA and SAGEM also recently merged. More and more of the European companies are entering into joint ventures with one another, most notably BAE (British Aerospace), EADS, and Finmeccanica. In addition, BAE is also working at joint ventures with US companies and acquiring smaller US defense firms, and the article is of the opinion that the company may sell off assets like its stake in the Airbus and is selling its stake in Sweden's Saab aircraft. And EADS, so far unsuccessfully, ha been looking to buy out Thales. 10:09:42 PM

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