£346m Aussie buy boosts BAE Systems

By THIS IS MONEY
Updated:

 

BAE Systems today agreed to buy Australian defence contractor Tenix Defence for up to A$775m (£345.8m) in cash, to boost its operations in the country.

The acquisition of privately owned Tenix will more than double BAE Systems' presence in Australia.

'This transaction significantly enhances the depth and breadth of our capabilities in Australia, adds a major naval business to our portfolio and significantly increases our land capability,' Jim McDowell, chief executive of BAE Systems Australia, said.

BAE Systems Australia has more than 5500 staff and annual sales of over A$1.2bn. Tenix had earnings of A$56m and sales of A$699m, for the year to June 2007.

BAE said the acquisition is expected to deliver a return in excess of its cost of capital in the first full year following the deal.

Private-equity firm Carlyle Group and Australia's Leighton Holdings had been considered as possible buyersof Tenix. Tenix had appointed UBS to advise on a sale after the owners, the Salteri family, decided to consider an auction following a strategic review of the business.

The firm is building two amphibious ships for the Australian navy in a £1.5bn joint contract with Navantia.

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