CENTREVILLE, Va.---Worldwide defense and aerospace companies announced or completed M&A deals worth more than $29 billion in 2001, making the year one of the most productive on record. The year saw the rise of a new generation of companies to challenge the industry's heavyweights, and further consolidation in Europe, reports Defense Mergers & Acquisitions in its just-published year-end review.
Stuart McCutchan, editor of the DM&A newsletter, commented: "During the 1990s our rankings were dominated by Boeing, Lockheed Martin, and Raytheon -- companies who used M&A activity to transform themselves into the largest defense businesses in modern history. By decade's end the ''Big Three" were in a league of their own. But recent activity has changed all that. In 2001 Northrop Grumman used acquisitions to more than double in size, knocking Raytheon from the number three spot. It and General Dynamics were the year's first- and second-ranked acquirers, respectively.
"Significantly, if you'd combined the deals made by the Big Three during the year, they still wouldn't have made the Top Ten.''
In Europe, 2001 was the "Year of the Joint Venture.'' JVs were created in the missiles and helicopters markets which each created second-ranked challengers to vie with U.S. leaders. Two other deals saw one JV partner buy out the other. McCutchan stated: "These deals illuminated the inherent instability of the joint venture as a form of ownership -- an important consideration when the JV is being touted as the most promising vehicle for U.S.-European deal-making.''
Trans-Atlantic M&A activity, which last year accounted for four of the top 25 deals, this year accounted for only one. That deal -- the buy of Silicon Valley Group by The Netherlands' ASM Lithography -- was approved after close U.S. political and regulatory review. On the other side of the Atlantic, matters got much more heated, with the European Union shooting down General Electric's proposed $45 billion acquisition of Honeywell International.
Defense Mergers and Acquisitions is a newsletter and online daily information and database service which has covered M&A activity in the defense, aerospace and government contracting markets since 1989.
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Defense Mergers & Acquisitions Tallies $30 Billion in Deals in 2001
