Here we go again--only this time it's Tony's crowd.

[spindrifter]

BAE considers £6bn bid for New York firm with an eye to lucrative US military work

David Gow in Brussels
Tuesday March 21, 2006

BAE Systems, Britain's leading arms contractor, is considering a $10bn (£6bn) bid for L3, the New York-based defence electronics company, in a move to shore up its position in America's lucrative military market, senior industry sources said yesterday.

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This month, the company won the contract to provide explosives detection equipment at Heathrow's new fifth terminal and said it would boost sales this year to $12bn after the acquisition of rival Titan. Neither company would comment on the proposed deal but it is known the two held merger discussions in 2002 prior to talks between BAE and Boeing on a tie-up. Negotiations with L3 were aborted on the grounds of price but have been revived.

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Mike Turner, BAE's chief executive, has repeatedly made plain his group's desire to expand in the US where its sales have quadrupled in the last five years to $80bn, notably with last year's £2.2bn purchase of tank-maker United Defense. The group makes 40% of its sales in America. One industry executive said the Pentagon, which favours home-grown companies under congressional pressure, would not allow BAE - or any other overseas group - to acquire or merge with the country's prime contractors such as Lockheed, Boeing or Northrop Grumman - or even missile-maker Raytheon.

A BAE insider, confirming the intent to sell the Airbus stake, said the aim was to invest the proceeds in the US but added: "The problem is that there is not a lot available to buy."

http://business.guardian.co.uk/story/0,,1735474,00.html