Friday, September 14, 2012

EADS-BAE talk merger as India looks at more Hawks

Neelam Mathews
Sept 14, 2012

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 Even as EADS and BAE Systems are in discussions to merge the two companies which could result in EADS owning 60 percent, BAE Systems has received a Request for Proposal (RFP) from Hindustan Aeronautics Limited (HAL) for a potential order to supply products and services for the manufacture of 20 Hawk Advanced Jet Trainer (AJT) aircraft. The aircraft, to be built by HAL in Bengaluru, will fulfill the Indian Air Force’s requirement for its prestigious aerobatic team.

The combination entity with annual revenues close to $100 billion will result in the creation of a strong competitor to both Boeing and  Lockheed Martin. “EADS brings to the combination strength in European mainland markets while BAE brings strong influence on the lucrative Middle Eastern and South African markets,’ says  an analysis done by Aviotech.

The merged company will make its presence across a larger spectrum of project opportunities in India.

It will provide a strong political impetus to large EADS programs in India, benefit EADS from the historical association of HAL and BAE systems, benefit EADS  that will tap the strong supply chain of BAE systems in India, help reduce numbers and keep costs manageable and provide a strong impetus to potential HALE and MALE UAV development projects with DRDO.

According to WSJ,  a  deal could intensify competition for shrinking defense spending by Western governments and rising military investments in the Mideast and parts of Asia. 

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