Finmeccanica buys US military contractor for €3b

Italian aerospace and defense company Finmeccanica agreed to buy the US military contractor DRS Technologies for €3 billion (US$4 billion), an Associated Press report said.

The deal is expected to make Italy's leading defense company a 'key player' in the US defense market, the report said.

Rome-based Finmeccanica will pay €52.50 (US$81) per share in cash, representing a 32% premium over DRS's 30 day average stock price.
The deal includes €780 million (US$1.2 billion) in net debt, the Associated Press report said.

While Finmeccanica boosts its international role as a key supplier of defense and security systems, DRS hopes the new company will be able to bid on large-scale projects in the US and abroad.

Finmeccanica joins Airbus parent EADS as a European company pushing into the lucrative US defense and security market, following EADS' partnership with Northrop Grumman to sell mid-air refueling tankers to the Air Force and its purchase of PlantCML, a California emergency call center company, the report said.

To satisfy US regulations for foreign-owned defense companies, DRS will keep its own board of directors comprised mostly of US citizens holding high security clearance and a special oversight board. It will maintain its current management and headquarters, located in Parsippany, New Jersey, the report further said.