Alvis Acquires Vickers Defence For £16.2 Mn (Aug. 6)
Rolls-Royce plc and Alvis plc announced today (2 August 2002) that they have reached agreement on the sale of Vickers Defence Systems (VDS), a leading integrated high technology land defense systems business, and associated businesses, to Alvis for a gross consideration of £16.2 million. The disposal is conditional upon Alvis shareholder approval and gaining clearance from the relevant UK and South African regulatory and competition authorities.
Under the terms of the agreement, Alvis, a UK-based company with interests in armored vehicles and other specialist vehicles for military application, will acquire the main VDS facilities in Newcastle upon Tyne, Vickers Bridging in Wolverhampton and the Vickers OMC armored vehicle facilities in South Africa. Between them, the companies employ some 1300 people.
VDS customers comprise mainly the UK Ministry of Defence and overseas Governments. The main product in recent years has been the Challenger II Main Battle Tank for the UK MoD and Oman government. Both contracts have been material to the financial performance of VDS and are now effectively complete, with only minor deliveries outstanding. In 2001, VDS recorded sales of £160 million, profit before tax of £37 million and net assets of £47 million.
The company has been part of Rolls-Royce plc since 1999 following the acquisition of Vickers plc.
John Rose, Chief Executive of Rolls-Royce, said: "This agreement offers the best future for the VDS business. Rolls-Royce bought Vickers in 1999 to create a world-leading marine business. The successful integration of the marine activities and the disposal of the non-core businesses acquired have created significant shareholder value."
Vickers Defence Systems (VDS) designs, integrates and supplies a wide range of land systems solutions for the UK and overseas defense markets. It operates in both the heavy and light armor markets. The company employs 600 people at plants at Newcastle upon Tyne and Leeds.
Vickers Bridging products include the BR90 tactical bridging system, comprising close support, tank launched bridges and general support bridges, capable of spanning gaps from 9 to 60 meters. There are more BR90 bridges in service than any other competing system in the world. The company is based in Wolverhampton, UK and employs 75 people.
Vickers OMC, based in Benoni, South Africa, provides a wide range of armored vehicles including main battle tanks and police and security vehicles, such as the Scout, which is in service with the United Nations. It employs approximately 650 people.
Alvis plc is a UK-based company with interests in armored fighting vehicles and other specialist vehicles for military application. It is quoted on the London Stock Exchange and has its headquarters in London. The Alvis Group has a global reach, having major manufacturing facilities in Scandinavia as well as the UK, and having exported military vehicles to more than 60 countries.
Rolls-Royce is a global company providing power for land, sea and air. It employs some 40,000 people in more than 30 countries, including over 25,000 in the UK, 5,000 in the rest of the Europe and over 8,000 in North America. The company has a balanced business portfolio with leading positions in civil aerospace, defense aerospace, marine and energy markets. With annual sales of around £6 billion and a forward order book of nearly £17 billion, its technology is applied over a wide range of products that generate high-value services throughout their operational lives.