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GENERAL DYNAMICS TO ACQUIRE STEYR OF AUSTRIA

30 Sep 03. General Dynamics (NYSE: GD – News) plans to acquire Steyr Daimler Puch Spezialfahrzeug Aktiengesellschaft & Company KG (Steyr Spezialfahrzeug) and its parent company, SSF-Holding GmbH, of Austria, on October 2, 2003. General Dynamics had previously acquired 25 percent of the parent company, in 1999.

The acquisition will be immediately accretive to General Dynamics’ earnings, and General Dynamics anticipates that Steyr Spezialfahrzeug will generate approximately $230 million in sales in 2003. The company has a backlog of approximately $300 million.Steyr Spezialfahrzeug, which has approximately 400 employees, will become part of General Dynamics’ Combat Systems group. There are no plans to relocate any production activity from present locations as a result of the acquisition.

Hans Michael Malzacher, current chairman of the managing board, will remain and will be responsible for the unit’s performance. He will report to Arthur J. Veitch, executive vice president and group executive for General Dynamics Combat Systems.

“Steyr Spezialfahrzeug will significantly broaden General Dynamics’ combat vehicle offerings and creates additional opportunities for us in the United States, Europe and other parts of the world,” said Veitch.

Headquartered in Vienna, Austria, Steyr Spezialfahrzeug developed the Pandur family of wheeled combat vehicles and began production in 1996. About 285 Pandur 6×6 wheeled armored vehicles are in service or on order worldwide. Projects for 6×6 and 8×8 Pandur vehicles are under evaluation in several countries. General Dynamics’ Land Systems unit has been the U.S. licensee for Pandur vehicles since 1999.

Steyr Spezialfahrzeug also makes the Ulan tracked infantry fighting vehicles and family of variants. Production of 112 Ulan vehicles for the Austrian Army is in progress, and 50 units have been fielded.

Comment: GD’s march into Europe continues and the acquisition of Steyr strengthens its APC range. Although Larry Johnson told BATTLESPACE in July that the company was not interested in AlvisVickers given the concentration on system house acquisitions, this latest twist looks like the company is looking to expand its European platform business. Perhaps the company will wait until the FRES requirement firms up

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