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EUROSYSTEMS TAKES OFF

9 Dec 02. AMS supremo David Singleton gave an upbeat briefing to journalists on Tuesday and as well as informing them that AMS was on target to meet all its profits and double-digit growth, over 10%, predications, its is also on-course to build the new JV announced last week between BAE SYSTEMS and Finmeccanica, EUROSYSTEMS. (See BATTLESPACE UPDATE Vol.4 ISSUE 49, December 6th 2002 BAE CONFIRMS TALKS WITH FIMECCANICA). Singleton confirmed that EUROSYSTEMS was being developed to compete with Thales in Europe and overseas and that more of the partners’ companies will be included in the venture including large parts of BAE AVIONICS. Mike Perowne, confirmed that his segment based in Frimley and New Malden taking in the old SEMA and radar businesses following the CARS merger, was the engine behind many of the C4ISTAR contracts being bid by BAE SYSTEMS. “We provide a good deal of the engineering expertise for BAE at first and second tier level of the bidding and contract process, we are building a world-class systems integration business on the back of our extensive in-house capability which the new organisation has brought together.”

Singleton’s record is impressive, bringing together disparate elements of the BAE and old Marconi empire which were in decline, he has made huge progress. AMS has already won a contract for all 13 NATO ground based radars when the company budgeted for 5, it expects an order for 3 more form Poland and with orders from Hungary, Czechoslovakia, Greece, Oman, Norway, Turkey, Denmark and South America, the order book is a record 16 systems. In addition its has won the radar systems work on the Type $5 and Horizon frigates with Sampson and EMPAR respectively and is very hopeful of winning the UK’s £1bn+ GBAD contract which we will cover in detail in our January issue. AMS developed the first BISA on BOWMAN to enhance and replace the existing ADCIS system

EUROSYSTEMS could take up to two years to complete, Finmeccanica’s chairman said Thursday. Pierfrancesco Guarguaglini, who is also Finmeccanica’s co-chief executive together with Roberto Testore, said Finmeccanica and BAE had only signed a non- binding letter of intent.

“We could then reach the stage of a memorandum of understanding and the due- diligence … but, as with Marconi, these are things that can last up to two years,” he told reporters on the sidelines of a conference on Marconi Mobile.

In August Finmeccanica bought Marconi PLC’s defense communications unit, Marconi Mobile, for €614m, consolidating its position in the defense sector.

Testore said an alliance with BAE made sense for Finmeccanica, but added such deals need to be made at the right conditions, which “takes time.” Last week BAE said that it hoped to conclude discussions with Finmeccanica in the “near future,” but declined to say what businesses will be folded into the new company.

Finmeccanica’s Testore said the joint venture with BAE should be considered as an enhancement of Alenia Marconi Systems (AMS), an existing alliance between the two companies that makes ground and naval radar and which has annual revenue of around €1.2bn.

“The joint venture relates to defense electronics,” Testore said, adding Finmeccanica’s radar unit Galileo Avionica could be part of the venture. Testore also said the Italian government, Finmeccanica’s controlling shareholder with a 32% stake, could name a separate advisor to Vitale & Associati SpA, which is advising Finmceccanica on the joint venture. Local press reports said in recent days the government has reservations about the joint venture as the British defense contractor would end up with at least 60% control. Testore said such reports were wrong. Reports also hinted that the economy ministry’s concerns could mean the deal wouldn’t be signed by Dec. 20, as originally planned.

On December 12th, the board of Finmeccanica named Vitale & Associati SpA as advisor to EUROSYSTEMS, Finmeccanica said i

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