BAE Systems to sell its SA armoured vehicle subsidiary to Denel

12th 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 also 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. The sale is dependent on the gaining of the necessary regulatory and other approvals.

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.

BAE Systems has 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. “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. The intended deal between the two companies was announced on Monday.

Edited by Creamer Media Reporter

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