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31 Jan 07. Rheinmetall to take up a majority interest in Chempro, supplier of high-tech force protection systems. In taking up a majority interest of 51% in Chempro GmbH of Bonn, and gradually increasing its stake in ADS Gesellschaft für aktive Schutzsysteme mbH of Lohmar, the Düsseldorf-based Rheinmetall Group continues to develop its position as a supplier of systems for ground forces. For the companies involved, cooperation holds the prospect of continued success in a forward-looking sector. Founded by the Deisenroth family, Chempro GmbH and ADS GmbH both belong to a top technology group specializing in highly sophisticated protection systems for military vehicles. As a maker of high-performance protection systems, Chempro plays a major role in a number of important military procurement programmes both at home and abroad. For example, the high level of protection displayed by the Bundeswehr’s new Puma infantry fighting vehicle partly results from products made by Chempro GmbH. Effective force protection systems figure prominently in current military procurement programmes as the armed forces look for new ways of protecting the growing number of troops deployed in harm’s way. Continued growth in the global market for such products is expected. ADS GmbH is currently developing a new generation of active protection systems. In coming years, Rheinmetall intends to gradually increase its stake in ADS in order to obtain a majority interest in the company. AMAP-ADS is a new high-tech product that detects and analyzes threats in the immediate vicinity of the vehicle, actively engaging them with appropriate countermeasures. Currently undergoing testing by customers in a number of nations, the product is scheduled to go into serial production by 2008 at the latest. The two acquisitions still require approval from the merger control authorities.

01 Feb 07. Esterline Corp. agreed to buy CMC Electronics Inc. for $335m in cash, boosting Esterline’s avionics and controls business. CMC, an aerospace and defense avionics supplier, is based in Canada and had revenue of C$205m ($173.7m) in the 12 months ended Sept. 30. The company’s earnings before interest, taxes, depreciation and amortization was 12.5 million Canadian dollars ($10.6m). Esterline expects the deal to close in 30 to 45 days, pending regulatory approvals. “CMC takes us a long way in adding to the tool kit of solutions that we are assembling for our avionics customers,” said Esterline, which is a top supplier for Boeing Co.’s 787 Dreamliner long-distance jet. Bear, Stearns & Co. advised Esterline.

30 Jan 07. Thales-DCN Deal Signed, Setting Stage for European Naval Consolidation. The French government and industry announced last week a long-awaited signing of the convergence naval agreement which puts much of Thales’ domestic naval activities into DCN, marking a step in national consolidation and preparing for a future European reorganization. A joint statement from the Defense and Finance ministries, DCN and Thales on Jan. 30 said the agreement had been signed, allowing Thales to take 25 percent of DCN’s share capital.“This important consolidation is being undertaken with a view to forming a
European naval defense platform in which DCN will play an active role,” the joint statement said. Executive chairmen Jean-Marie Poimbeouf of DCN and Denis Ranque of Thales said in the joint statement: “The increased integration of our two groups will make us more responsive to our customers’ needs and more competitive.” The deal would position DCN as the French motor for building a future European naval industry, they said. Under the deal, Thales transfers its Thales Naval France division to DCN and pays €100m to 150m ($129 million to $193.8m) in cash in exchange for a 25 percent stake in DCN. The state retains the rest. Finance Ministry officials were not available for comment. Defense Minister Michèle Alliot-Marie announced the agreement in December 2005, but the signing was held

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