Acquisition Of Oerlikon Contraves AG Turns Rheinmetall Into A World-Class Supplier Of Medium-Calibre Weapons Systems And Ammunition
Source : Rheinmetall AG)
(Read Oerlikon-Buehrle statement below--Editor

Rheinmetall DeTec AG ­ the defence technology arm of the Rheinmetall group ­ has taken up a 100% interest in Oerlikon Contraves AG of Zurich, Switzerland. A contract to this effect has now been signed in Zurich. The corporate buyout still requires the approval of the Federal Cartel Office.
Oerlikon Contraves AG has up until now belonged to Oerlikon-Bührle-Holding AG. As part of a strategic reorientation, the Oerlikon-Bührle group is pulling out of the defence sector, and will henceforth focus on its core competencies: thin-film solutions and vacuum technologies.
Rheinmetall's acquisition of Oerlikon Contraves AG and its integration in Rheinmetall DeTec AG, founded on July 1st 1999, is enabling vertical and horizontal optimisation of the company's value-added chain. By deepening and broadening its range of products, and strengthening its ability to offer complete system solutions, the move will improve Rheinmetall's competitiveness and access to world markets.
Moreover, the merger of Rheinmetall DeTec AG with Oerlikon Contraves AG represents a significant advance in the necessary process of consolidation currently underway in the European armaments industry. Rheinmetall DeTec AG will continue in future to play an active role in rationalising Europe's defence technology sector.
Today, this new defence technology holding company employs a staff of 8,500 and generates turnover of around DM 3 billion. It is a leading centre of excellence in the world of ground forces technology, and belongs to the elite of the European defence electronics industry. Rheinmetall DeTec AG has thus successfully laid the groundwork for expanding its strategic strengths and intensifying its existing competence as a supplier of defence systems.
Oerlikon Contraves AG is a globally respected supplier of cannon systems and combined cannon and guided weapon systems used in an antiaircraft role. Systems made by Oerlikon Contraves AG are now in service in forty different countries. The company's approx. 2,100 employees produce a total turnover of SFr 500 million. It has subsidiaries in Germany, Italy, Canada, Singapore and Malaysia.
The importance of being able to supply complex weapons systems is steadily gaining ground worldwide. Supplying such weapons systems calls for extensive knowledge in the fields of sensor technology, optronics, fire control systems and integration. Indispensable also are such services as training, simulation and logistical support for the overall system.
Against this backdrop, the acquisition of Oerlikon Contraves AG systematically supplements the array of products offered by Rheinmetall DeTec AG. With this move, Rheinmetall AG's defence arm is expanding its competence in the medium-calibre sector, where it is emerging as a major system integrator.
By combining the operations of Oerlikon Contraves AG with those of Rheinmetall DeTec AG's unit Mauser-Werke Oberndorf Waffensysteme GmbH, a world-class centre of excellence in the field of medium-calibre weapons and ammunition systems has come into being. Furthermore, in the field of fire control technology, in combination with STN ATLAS Elektronik GmbH (in which Rheinmetall DeTec holds a majority stake), the path to becoming a supplier of complete systems is now clear.
In order to reinforce Swiss identity and continuity in the field of defence technology, a qualified minority share in the company will be offered to RUAG SUISSE by Rheinmetall DeTec AG.
When Switzerland's armaments industry was privatised, RUAG SUISSE took over the country's formerly state-run defence technology activities. Its mission is thus linked with maintaining existing technological competencies on behalf of the Swiss Army. Qualified partnerships with Swiss and international companies are to be systematically strengthened.
A constructive working relationship has long existed between RUAG SUISSE and the defence technology division of Rheinmetall AG in the field of medium-calibre ammunition. As RUAG SUISSE has held a 45% stake since 1998 in the Rheinmetall units Nitrochemie Wimmis AG and Nitrochemie Aschau GmbH, a legal and mutually beneficial link already exists between the two corporations.
Building on this example of successful Swiss-German co-operation in ammunition production, in a financial alliance of RUAG SUISSE, Oerlikon Contraves AG and Rheinmetall DeTec AG, Rheinmetall intends to set new standards of excellence by exploiting synergies, particularly in the field of development.
With the acquisition of Oerlikon Contraves AG, the Rheinmetall DeTec AG group of companies will generate sales of around DM 3.6 billion and employ a staff of 10,750, making it ­ even on the European level ­ a major and highly competitive factor in securing national and international defence technology core competencies, especially in the field of ground forces equipment.

Oerlikon-Bührle Holding AG Sells Oerlikon Contraves Defence to Rheinmetall
(Source : Oerlikon-Buehrle Holding; Issued Sept. 14)

- Attractive development opportunities for Oerlikon Contraves Defence in link-up with Rheinmetall
- Oerlikon-Bührle: a further step towards focussing on selected technologies
- Contraves Space to become an autonomous unit within Oerlikon-Bührle.

Zurich-based Oerlikon-Bührle Holding AG is selling Oerlikon Contraves Defence to Rheinmetall DeTec AG, headquartered in Ratingen, Germany. Rheinmetall DeTec AG is a subsidiary of the Rheinmetall group. Rheinmetall DeTec AG is acquiring 100 per cent of Oerlikon Contraves Defence share capital under the terms of the sale agreement signed in Zurich.
Although Oerlikon Contraves Defence enjoys a strong position in land-based anti-aircraft gun systems, the company lacks the critical mass essential to its long-term survival. By integrating Oerlikon Contraves Defence into Rheinmetall DeTec AG , Oerlikon Contraves will become a competence center for medium-caliber, land-based air defense systems.
Established high-tech know how will remain in Switzerland. Ernst Odermatt, the company's present Chief Executive, will continue to manage the company with its workforce in Switzerland and abroad. The name Oerlikon Contraves is also being retained.
Contraves Space will continue operation as an autonomous unit within Oerlikon-Bührle.
The sale of Oerlikon Contraves Defence represents a major step towards the Oerlikon-Bührle Group's focus on selected technologies.
"Given global defense industry consolidation and the opportunities presented by joining a major, established player in the defense sector, we decided to merge our defense activities with Rheinmetall DeTec AG", said Dr. Willy Kissling, Chairman and CEO of Oerlikon-Bührle Holding AG.
According to Kissling, the sale to Rheinmetall DeTec AG will position Oerlikon Contraves Defence for continued successful development.
Rheinmetall DeTec is taking over the Oerlikon Contraves Group's defense division, with its development and production facilities in Switzerland, Italy, Germany, Canada, Singapore and Malaysia, retroactively per January 1, 1999.
Oerlikon Contraves Defence has a total workforce of approximately 2100, with 1300 jobs based in Switzerland. The division generated turnover of CHF 504 million in 1998. The sale is taking place for an undisclosed sum.

Integration in a leading European defense technology company
Rheinmetall is a technology group organized into automotive, electronics, defense and engineering divisions. Its workforce of 30,000 achieved sales worth 8.1 billion Deutschmarks in 1998. With a workforce of 8,500 and annual sales of around 3 billion Deutschmarks, Rheinmetall DeTec AG is a leading competence center for military weapons and munitions technology, systems and equipment, as well as military electronics.
The acquisition of Oerlikon Contraves Defence represents a consistent expansion of Rheinmetall DeTec AG's product range, and signals the growth of Rheinmetall DeTec's systems integration competence in the medium-caliber sector. Oerlikon Contraves Defence is set to join a modern defense division, with the systems integration capability to supply a full range of key technologies from a single source.
Oerlikon Contraves Defence and Rheinmetall DeTec have a considerable history of cooperation on various projects. Joint ventures also exist between Rheinmetall DeTec AG and RUAG SUISSE Holding (Nitrochemie Wimmis AG, Switzerland, and Nitrochemie Aschau GmbH, Germany).

Oerlikon Contraves Defence: leading position in low-level anti-aircraft weaponry
Oerlikon Contraves Defence, with its systems, munitions and Adats business units, is the leader in gun-based, low-level anti-aircraft weapons, and a supplier of missile and hybrid systems. Oerlikon Contraves Defence develops and manufactures fire control systems, guns and ammunition, making it the only company in the world that is capable of single-sourcing complete systems. The company's products are deployed in over 40 countries. The Adats guided weapons system is one of the leaders in its class. The company also produces vehicle-mounted weapons, naval anti-aircraft weapons, simulators and training systems, and electronic battlefield identification.
Although Oerlikon Contraves Defence enjoys a strong position in land-based anti-aircraft-artillery, the company lacks the critical mass essential to succeeding in the globally consolidating defense industry.
The association with Rheinmetall DeTec will strengthen Oerlikon Contraves Defence. The company is retaining both its name, and global responsibility for its operational business. The present management team under Ernst Odermatt will remain in place.
With its new position in the Rheinmetall Group, both customers and workforce will continue to perceive Oerlikon Contraves Defence as an innovative, dependable and competent partner, providing excellent products for defense against present-day and future airborne threats.

Contraves Space to remain part of the Oerlikon-Bührle technology group
The Contraves Space division of the Oerlikon Contraves Group is unaffected by the sale, and will become an autonomous unit within the Oerlikon-Bührle group, with Dr. Umberto Somaini remaining in charge.
Contraves Space specializes in developing and constructing payload fairings for launch vehicles, satellite structures and mechanisms, and scientific instruments. In 1998, the workforce of 255 achieved sales of 97 million Swiss francs. Thanks to its world-class competence as a supplier of components and specialist subsystems for space technology, the company is taking advantage of growth opportunities and ensuring its future successful development.

Organizational preparations for the merger
The Oerlikon Contraves Group's present defense and space activities involve companies based in Switzerland and abroad. Except for Oerlikon Aerospace Inc. in Canada, which is directly controlled by Oerlikon-Bührle Holding AG, these companies are owned by Oerlikon Contraves AG. Certain structural changes will be necessary to facilitate the merger.
In the first phase, Oerlikon Contraves AG will merge with the real estate interests of Werkzeugmaschinenfabrik Oerlikon-Bührle AG.
In the second phase, the space division, including non-operational real estate, will be transferred to a separate company named Contraves Space AG. Ownership of this new entity will be transferred to the nascent Oerlikon-Bührle technology group.
This opens the way for Rheinmetall DeTec AG to take control of Oerlikon Contraves AG and Oerlikon Aerospace Inc. (Adats).

Oerlikon-Bührle: further progress towards focus on selected technologies
According to the new strategy begun in autumn 1998, the Oerlikon-Bührle group will be realigning itself towards selected technologies. The main thrust will be to develop competencies in thin-film, vacuum and related areas. The financial resources for implementing this growth strategy are being procured through divestment of activities that are unrelated to the group's core business.
The sale of Oerlikon Contraves Defence will have a positive impact on Oerlikon-Bührle's balance sheet and lead to a significant reduction in net debt. The recent divestitures of its real-estate activities and the Bally Group are consistent with Oerlikon-Bührle's policy of focussing on selected technologies.


prev next

Press releases See all

Breaking News from AFP See all

Official reports See all