24 Jan 08. BAE, VT Inch Closer to Shipyards Merger. A deal to merge the naval shipyards of BAE Systems and the VT Group has inched forward with a commitment by the British government to a partnering agreement setting out the workload for the joint venture over the next 15 years. VT announced the government had signed the commitment on the proposed Terms of Business Agreement in an interim management statement for the period to the end of December, released Jan 24.
The company said it now awaits the Ministry of Defence’s commitment to a date for commencing the CVF aircraft carrier program before going ahead with the joint venture deal with BAE. The two companies head an alliance of contractors created to build Britain’s biggest-ever warships. Other alliance members are Babcock International, Thales UK and the MoD itself. The start of the £3.8bn ($7.4bn) program to build two 65,000-metric-ton aircraft carriers has been delayed while the government tries to resolve serious budget shortfalls projected for its armed forces equipment programs. Delaying the start of the carrier program by 12 or 18 months are two options the MoD has considered in recent weeks to balance its books over the next two to three years. Britain’s two remaining naval surface shipbuilders announced last year they would merge their operations in line with a government push to rationalize the maritime industry here as part of its Defence Industrial Strategy.
27 Jan 08. EADS is targeting sales of $5bn in North America by 2012, a five-fold increase in four years, with the first boost expected this year as the company finalises an acquisition in the US. Marwan Lahoud, strategic director and group number two, told the Financial Times the group was planning €10bn ($14.7bn) of acquisitions between now and 2020. Combined with strong organic growth, it hopes this will reduce the group’s dependence on Airbus, its commercial aircraft business. “Today we have €14bn in turnover of activities that are non-commercial aircraft,” he said. “This needs to get to €40bn.” This month Louis Gallois, EADS chief executive, set a target to bring Airbus revenues down from 65 to 50 per cent of group sales by 2020, with the balance to come from defence, security and services. However the strong growth in Airbus orders and accelerating rate of deliveries meant that EADS would have to hit the acquisition trail to meet its objectives, Mr Lahoud said. Much of the €10bn would be spent in the US, to help offset the punishing effects of the strong euro in an industry where sales are recorded in dollars. The group hoped to make a $1bn acquisition in North America this year and “by 2012 we should be half way to our ambitions in the US”, he said. EADS was targeting purchases not only in defence, but in the services, training, satellite and homeland security sectors. A deal valued at between $200m and $400m is understood to be imminent. (Source: FT.com)
24 Jan 08. Microsoft on Thursday shrugged off concerns about a slowdown in the tech industry with solid quarterly earnings and an optimistic outlook for the first half of this year, sparking a strong relief rally in its shares. The confident projection came on the back of strong PC demand, particularly in emerging market countries, along with a series of recent or new products ranging from server software to the Xbox 360 games console that together are expected to buttress the software company against the effects of a slowing US economy. Microsoft’s shares, which had already risen 4 per cent during the day, jumped another 6 per cent in after-hours trading, adding $30bn to its stock market value. (Source: FT.com)
23 Jan 08. Allegheny Technologies Inc. reported that its fourth-quarter profit fell more than 8% from a year ago, hurt by lighter shipments of stainless steel in the United States and Europe, where customers reduced inventories. Shares fell more than 11% in midday trading after the metals maker forecasted that busine