BAE Systems combat vehicles move has immediate payoff: $1 billion in contracts

ARLINGTON, Va., 27 June 2005. The BAE Systems move to acquire U.S. combat vehicles giant United Defense LP had an immediate and huge payoff Friday as the U.S. Army announced contract awards to the company worth $1.055 billion -- literally on the day that BAE announced it had completed acquisition of United Defense.

Jun 27th, 2005

By John Keller

ARLINGTON, Va., 27 June 2005. The BAE Systems move to acquire U.S. combat vehicles giant United Defense LP had an immediate and huge payoff Friday as the U.S. Army announced contract awards to the company worth $1.055 billion -- literally on the day that BAE announced it had completed acquisition of United Defense.

BAE is merging its existing land systems activities in the United Kingdom, Sweden, and South Africa with United Defense LP to form the Arlington, Va.,-based BAE Systems Land and Armaments operating group, which will provide integrated battlefield systems, military vehicles, artillery, naval guns, missile launchers and precision munitions.

In a statement Friday, BAE announced, "As a result of the global war on terror and ongoing international peacekeeping operations, the U.S. Department of Defense has significantly realigned budget priorities with an increased emphasis on land systems, including the refurbishment and upgrade of existing vehicles and equipment."

The Army's contracts to the new company on its first day of existence made that statement sound almost prophetic.

From a series of five transactions from the Army Tank-Automotive Command in Warren, Mich., the United Defense acquisition of BAE received $1.055 billion to remanufacture M2A3 Bradley fighting vehicles, other Operation Desert Storm vehicles, and M7 Bradley fire-support team vehicles, as well as for commander's independent viewers and A3 associated stockage list spares for combat vehicles.

The M2A3 Bradley remanufacturing delivery order is worth almost $896.4 million, the Operation Desert Storm vehicles remanufacturing delivery order is worth almost $78.4 million, the M7 Bradley fire-support team vehicles remanufacturing delivery order is worth $31.4 million, the commander's independent viewers contract modification is worth almost $30.6 million, and the A3 associated stockage list spares delivery order is worth $18.6 million.

The contract numbers, respectively, are W56HZV-05-G-0005; W56HZV-05-G-0005; W56HZV-05-G-0005; DAAE07-01-C-M016; and W56HZV-05-G-0005.

More information on the new BAE Systems Land and Armaments operating group is online at www.na.baesystems.com/landArmaments.cfm.

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