17 Apr 05. BAE over first hurdle in United Defence takeover. The US regulatory agency that investigates large foreign acquisitions of American companies for potential national security threats has cleared BAE Systems’s $4bn (£2.1bn) takeover of Pentagon contractor United Defence, according to officials who have seen the approval letter.The Committee on Foreign Investment in the US has caused severe problems for several high-profile cross-border mergers in recent years, including Chinese computer giant Lenovo’s attempted buyout of IBM’s loss-making PC unit. Amid growing anger in Congress over European Union moves to lift its arms embargo on China, CFIUS approval could have been made difficult for Britain’s BAE. In the past, protectionist members of Congress have used the CFIUS process to pressure regulators to hold up international deals, particularly when they involve sensitive military technologies. US officials have warned that lifting the China arms embargo could affect defence trade relations between the US and EU member states. But in a letter sent to BAE on Friday, CFIUS officials said they had completed a month-long review of the national security implications of the deal and found no reason for concern. The deal must still be cleared by US antitrust officials, but such approval is expected to be routine since BAE’s North American business has few overlaps with United Defence, which makes Bradley fighting vehicles for the US army. BAE’s takeover of United Defence – and the CFIUS clearance – marks a watershed for the Pentagon, which is now likely to have a foreign company as a prime contractor for several large weapons systems. BAE has long been the Pentagon’s largest foreign supplier, but in the past most of its work has been as a subcontractor to American defence groups. In addition to the Bradley, United Defence is also makes amphibious assault vehicles for the US Marine Corps and is building a battlefield cannon for the US army’s Future Combat System. US defence executives said Mark Ronald, a New Yorker who heads BAE’s North American unit, has smoothed the regulatory process – convincing Pentagon procurement officials BAE is a reliable and increasingly American company. Almost all the 23,000 employees in North America are US citizens. “BAE has done a really good job here of making themselves an American company,” said a senior executive at a rival contractor. “The foreign aspect of it has not been an issue.” Although CFIUS is chaired by the Treasury Department, Pentagon officials sit on the committee and have a vote in merger clearance. (Source: Peter Spiegel, FT Defence correspondent)
20 Apr 05. Honeywell International said first-quarter net profit rose 22% to $359m, or 42 cents a share, with revenue up 4% to $6.45bn. The Morris Township, N.J.-based industrial conglomerate was expected to post first-quarter EPS of 40 cents on sales of $6.38bn, according to Thomson First Call-compiled estimates. Aerospace profits rose to $379m from $307m, helped by 9% sales growth in the division, and automation and control solutions division profit rose to $201mfrom $195m, helped by rising margins and a 2% sales rise.
20 Apr 05. General Dynamics Corp. on posted a 25 percent increase in first-quarter earnings, reflecting improved results in its aircraft division. Quarterly income jumped to $336m, or $1.66 per share, from $269m, or $1.34 per share, in the year-ago period. Income from continuing operations amounted to $1.70 per share, topping the mean estimate of $1.53 per share from analysts polled by Thomson Financial. Net sales increased 4 percent to $4.82bn from $4.65bn a year earlier, but missed analysts’ view for revenue of $4.93bn. Revenue from its aerospace division totaled $753m, up 24 percent from $606m last year, as information systems and technology revenue expanded by 7 percent to reach $1.75bn. Meanwhile, marine systems revenue was 6 percent lower at $1.21bn. Sales of combat vehicles were $1.06bn, a decrease of 1 p