No counter-bids for DRS: but expect more suitors, targets
That statement from the American maker of defense electronics may finally lay to rest the speculation about the likelihood of another European company making a counter-bid for DRS.
Media reports had suggested that French defense electronics group Thales was considering a counter-bid for DRS. Despite DRS’s comments on Friday, don’t count Thales — or any of the European defense manufacturers — out yet.
Europe’s largest defense electronics company, Franco-German company EADS ( parent of Airbus), also wanted to counter-bid for DRS, but had said Finmeccanica’s offer was “too high.”
The Finmeccanica/DRS deal is expected to be just one of several acquisitions (or acquisition attempts, at the very least) by Europeans of U.S. defense companies, analysts have said.
U.S. defense spending — pegged at more than $500 billion for 2009 (excluding $100 billion for war-related costs) — is not expected to decrease in the next few years, regardless of who wins the presidential elections.
European companies looking to gain a presence in the U.S. defense market and get a piece of the defense budget — the world’s largest — are expected to target U.S. defense suppliers. DRS has already said it had received a higher offer from an unnamed foreign bidder and an expression of interest by a U.S. defense company.
And there is the parent company of French plane maker Dassault Aviation, which wants to acquire Alcatel-Lucent’s 20.8-percent stake in Thales.
Other possible targets include L-3 Communications, as well as Vought Aircraft Industries and Primus International — both of which were taken over by private equity firms who will eventually want an exit plan.