Looking to buy DRS

by: Matthew Potter
May 11, 2008

Category: Acquisitions, Finemeccanica, Italy, production program, SETA | RSS 2.0

This article discusses the idea that Finmeccanica, the Italian defense conglomerate, is looking at DRS Technology for an American acquisition. Like EADS and BAE the Italian company has been expanding its presence in the US. Its helicopter arm, Augusta Westland, won the VH-71 Presidential helicopter teamed with Lockheed Martin and is also trying to win the CSAR-X recompete post-protest. DRS which makes advanced sensors and electronics while providing SETA services has long been an attractive take over target. It’s stock though has done very well recently and for Finmeccanica to buy it would require a substantial investment. The acquisition of American companies makes sense for the large European companies as it helps them get around the arguments that the US is outsourcing defense. It also helps address issues with the complicated technology transfer laws and regulations that the US DoD currently operates under. The easiest way also for these companies to get into the large SETA and support role is to buy companies providing it. There are many small-to-medium companies in the US doing this kind of work that are certainly acquirable and provide a large, hardware company the ability to quickly expand into that area.

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