Britain's BAE Systems announced a $3.97 billion takeover of US armoured car maker United Defense Industries today.
BAE said it would pay $75 a share for the maker of the Bradley Fighting Vehicle, a premium of 29 per cent over United Defense's close of $58.26 on Friday.
The move puts BAE in line for lucrative repair and overhaul work on Bradley vehicles involved in operations in Iraq and Afghanistan. It also gains a company set to play a key role in the $100 billion Future Combat Systems programme that will provide the US Army with a new generation of armoured vehicles.
President George W. Bush's supplemental budget request submitted to Congress last month called for $5.4 billion to refit or repair equipment being used in Iraq and Afghanistan, including Bradleys seeing five times their usual rate of use.
More than 7,000 Bradley vehicles have been produced and the vehicle is expected to remain in the US Army fleet until 2030.
BAE said it expected the deal to close in mid-2005 and immediately boost earnings, with a step up expected in the first full year following completion.
In addition to Bradley vehicles, United Defense builds naval guns, missile launchers and munitions and repairs warships. The much larger BAE is involved in nuclear submarines, the Eurofighter jet and missile maker MBDA, and holds a 20 per cent stake in civil plane maker Airbus.