Team Infidel
Forum Spin Doctor
Wall Street Journal
October 16, 2008
Pg. B3
By August Cole
Finmeccanica SpA's $4 billion acquisition of DRS Technologies Inc. has cleared a key U.S. national security review, paving the way for the Italian conglomerate's push into the world's biggest defense market.
In a statement, DRS said that the approval by the Committee on Foreign Investment in the United States was "one of the conditions for the consummation of the merger." Such reviews examine the national-security ramifications of such transactions, and if there's an issue the White House can block it. The Italian government owns about a third of Finmeccanica.
Finmeccanica agreed to acquire DRS for $81 a share, or $4 billion, plus the assumption of $1.2 billion in debt. The transaction is expected to close later this year. It is one of the biggest transactions ever by a European defense contractor.
The transaction weathered both the recent credit-market crisis and the political firestorm this summer brought on by the U.S. Air Force's award of a controversial aerial tanker jet to a team of Northrop Grumman and European Aeronautic Defence & Space Co. A legal challenge by Boeing Co. of the $40 billion contract eventually led the Pentagon to postpone the award.
The deal was helped by the strong relationship between the U.S. and Italy on defense matters, said Jeffrey Bialos, a partner at Sutherland Asbill & Brennan in Washington and a former deputy undersecretary of defense during the Clinton administration who has been involved international defense issues. "The depth of our cooperation is more than most of the other countries on the continent and I think this approval reflects that," he said.
DRS is involved in everything from advanced systems for intelligence programs to helping outfit existing military hardware such as Navy destroyers and Army tanks with high-tech gear.
October 16, 2008
Pg. B3
By August Cole
Finmeccanica SpA's $4 billion acquisition of DRS Technologies Inc. has cleared a key U.S. national security review, paving the way for the Italian conglomerate's push into the world's biggest defense market.
In a statement, DRS said that the approval by the Committee on Foreign Investment in the United States was "one of the conditions for the consummation of the merger." Such reviews examine the national-security ramifications of such transactions, and if there's an issue the White House can block it. The Italian government owns about a third of Finmeccanica.
Finmeccanica agreed to acquire DRS for $81 a share, or $4 billion, plus the assumption of $1.2 billion in debt. The transaction is expected to close later this year. It is one of the biggest transactions ever by a European defense contractor.
The transaction weathered both the recent credit-market crisis and the political firestorm this summer brought on by the U.S. Air Force's award of a controversial aerial tanker jet to a team of Northrop Grumman and European Aeronautic Defence & Space Co. A legal challenge by Boeing Co. of the $40 billion contract eventually led the Pentagon to postpone the award.
The deal was helped by the strong relationship between the U.S. and Italy on defense matters, said Jeffrey Bialos, a partner at Sutherland Asbill & Brennan in Washington and a former deputy undersecretary of defense during the Clinton administration who has been involved international defense issues. "The depth of our cooperation is more than most of the other countries on the continent and I think this approval reflects that," he said.
DRS is involved in everything from advanced systems for intelligence programs to helping outfit existing military hardware such as Navy destroyers and Army tanks with high-tech gear.