Team Infidel
Forum Spin Doctor
Financial Times
January 10, 2008 By Alistair Gray
BAE Systems has won a deal with the US government to supply bomb-disposal vehicles, easing concerns about the prospects for its armoured vehicle business in the event of a troop reduction in Iraq.
Britain's biggest defence manufacturer beat four other bidders to win an agreement worth a potential Dollars 2.3bn to supply the US defence department with up to 2,500 mine-protected vehicles by 2015.
An initial Dollars 20m order of nine vehicles will be delivered later this year.
The shares rose 16p to 508p on the news. The contract comes after BAE's Dollars 4.1bn takeover of Armor Holdings, a US armoured vehicle maker, in June.
The deal made BAE the world's leading armoured vehicle business.
Designed for use by US forces, BAE's "medium mine-protected vehicles" are built to clear routes littered with mines and improvised explosive devices, which, according to the defence department, are responsible for almost two-thirds of US casualties in Iraq.
Orders for standard counter-insurgency vehicles, supplied currently by BAE, are likely to fall, said Colin Crook, a UBS analyst.
But he said that the deal suggested "the sustainability of BAE's military vehicle work is much better than many commentators may fear".
Confirmation of the deal by BAE yesterday follows the sale last month of its surveillance and attack business to Cobham for Dollars 240m.
BAE recently agreed to acquire MTC Technologies, which offers support and maintenance to the US military, in a deal valued at Dollars 450m.
Jeremy Batstone, an analyst at Charles Stanley, said the MMPV contract was a further sign BAE could secure orders from the US in spite of a justice department investigation into whether its Al Yamamah arms deal with Saudi Arabia broke anti-corruption laws. BAE denies any wrongdoing.
January 10, 2008 By Alistair Gray
BAE Systems has won a deal with the US government to supply bomb-disposal vehicles, easing concerns about the prospects for its armoured vehicle business in the event of a troop reduction in Iraq.
Britain's biggest defence manufacturer beat four other bidders to win an agreement worth a potential Dollars 2.3bn to supply the US defence department with up to 2,500 mine-protected vehicles by 2015.
An initial Dollars 20m order of nine vehicles will be delivered later this year.
The shares rose 16p to 508p on the news. The contract comes after BAE's Dollars 4.1bn takeover of Armor Holdings, a US armoured vehicle maker, in June.
The deal made BAE the world's leading armoured vehicle business.
Designed for use by US forces, BAE's "medium mine-protected vehicles" are built to clear routes littered with mines and improvised explosive devices, which, according to the defence department, are responsible for almost two-thirds of US casualties in Iraq.
Orders for standard counter-insurgency vehicles, supplied currently by BAE, are likely to fall, said Colin Crook, a UBS analyst.
But he said that the deal suggested "the sustainability of BAE's military vehicle work is much better than many commentators may fear".
Confirmation of the deal by BAE yesterday follows the sale last month of its surveillance and attack business to Cobham for Dollars 240m.
BAE recently agreed to acquire MTC Technologies, which offers support and maintenance to the US military, in a deal valued at Dollars 450m.
Jeremy Batstone, an analyst at Charles Stanley, said the MMPV contract was a further sign BAE could secure orders from the US in spite of a justice department investigation into whether its Al Yamamah arms deal with Saudi Arabia broke anti-corruption laws. BAE denies any wrongdoing.