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UK-owned SA armoured vehicle subsidiary to revert to local control

22nd August 2014

By: Keith Campbell

Creamer Media Senior Deputy Editor

  

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UK-based global defence group BAE Systems is to sell its South African armoured and mine-protected vehicle and related systems subsidiary BAE Systems Land Systems South Africa (LSSA) to South Africa’s State-owned defence group, Denel. LSSA is located in Benoni, east of Johannesburg. BAE Systems holds 75% of LSSA and Denel will acquire the 25% of the company now owned by South African private-sector (and black empowerment) company DGD Technologies (2001) to give the State-owned entity 100% of the Benoni-based business.

“It’s a good development for the company, especially regarding the local market and other markets in which Denel is strong,” assures LSSA business development and communications director Natasha Pheiffer. Although the company will no longer have the benefit of BAE Systems’ global sales network, this will not be a problem. “We have established our name internationally.”

The sale is dependent on being granted the necessary regulatory and other approvals. It is hoped that these processes will be completed and the transaction concluded by the fourth quarter of this year.

BAE Systems decided to dispose of LSSA because the global group sees wheeled armoured and mine-protected vehicles as not being a core business. “This proposed sale will further shape our portfolio around our core capabilities in tracked, combat and amphibious vehicles and weapon systems, which represent markets where we possess strong franchise positions and discriminating capabilities,” affirmed BAE Systems Platforms and Services president Erwin Bieber at the announcement of the deal on August 11. “We also recognise that the LSSA employees have made a significant contribution to BAE Systems over the last ten years and we believe that transitioning ownership to Denel will better position the LSSA business to achieve its full potential working with a strong South African company.”

“This proposed acquisition is in line with our company’s strategy to broaden our leading land system solutions through the addition of resources and assets, such as those of LSSA, which complement our capabilities in the design and integration of combat turrets, artillery and infantry systems and armoured vehicles,” stated Denel group CEO Riaz Saloojee.

LSSA is composed of three complementary divisions – OMC, which specialises in wheeled armoured, mine-protected and patrol vehicles; Gear Ratio, which focuses on mechanical driveline components, gears and precision-machined parts; and Dynamics, which is responsible for turrets, remotely operated weapons stations and fire control systems. It employs some 500 people.

The company currently has six vehicles or families of vehicles it can offer customers. These are the RG12, RG31, RG32, RG34, RG35 and RG41. The RG12 is a 4 × 4 armoured multipurpose security vehicle optimised for police and paramilitary forces. The RG31 is a 4 × 4 mine-protected armoured personnel carrier, but better known by its US classification as a mine-resistant ambush-protected, or Mrap, vehicle. The RG32 is a family of 4 × 4 mine-protected patrol and light tactical vehicles, while the RG34 is a 4 × 4 multipurpose mine-protected vehicle. The RG35 is the company’s latest multirole armoured vehicle family, with three variants (two 4 × 4s and one 6 × 6). The RG41 is an 8 × 8 armoured combat vehicle.

Dynamics’ main products are the SD-ROW self-defence remotely operated weapon station and the TRT gun turret. It also produces sights for vehicle commanders and gunners, as well as other components for turrets. Gear Ratio manufactures products for civilian use in transport and mining, as well as for military vehicles. It recently began to diversify into the railway market.

Edited by Creamer Media Reporter

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