Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT) Brazilian subsidiary AEL Sistemas SA has set up a joint venture with aerospace company Embraer SA (NYSE: ERJ; BOVESPA: BR3), Harpia Sistemas SA. As part of the deal, Embraer subsidiary Embraer Defesa e Segurança SA has acquired 25% of AEL.
Embraer Defesa will own 51% of Harpia and AEL will own 49%. Harpia will be based in the capital Brasilia, and will develop unmanned aircraft systems, avionics, and simulators. It will provide contractor logistics support in these areas for the Brazilian market. Later, the company will operate in other markets.
Elbit Systems president and CEO of Joseph Ackerman said, "The establishment of this jointly-owned company is a significant step for Elbit Systems and AEL, marking another milestone in our long-term operations in Brazil, a market which we consider of the utmost importance. These transactions take the collaboration between Embraer Defesa and AEL to new heights, which we are confident, will be of mutual benefit to both of our companies as well as to the Brazilian customers."
Elbit Systems and Embraer, with the support of AEL, have a successful track record of cooperative relationships. AEL was one of the first suppliers of systems for Embraer's turboprop Tucano basic trainer and the subsonic fighter AMX. Currently, AEL provides the avionics for the Super Tucano turboprop light attack and advanced training plane and the F-5M fighter jet that Embraer is modernizing for the Brazilian Air Force.
Embraer Defesa president Luiz Carlos Aguiar said, “The creation of Harpia is in perfect alignment with Brazil’s national defense strategy and it will be an important instrument for meeting the needs of the armed and the security forces. Furthermore, the potential for dual application of unmanned aerial systems and the technology generated through it must also be highlighted."
Yesterday, Elbit Systems subsidiary Elbit Systems of America LLC won a small contract to supply Boeing Military Aircraft with the Color Helmet Mounted Display (HMD) for CV-22 Osprey tiltrotor aircraft for the Air Force Special Operations Command (AFSOC). Work will be performed in Fort Worth, Texas. The contract, will allow Elbit Systems of America to provide the US Air Force with a Color HMD that includes full helmet tracking capability, meeting AFSOC's objectives in the near and long term.
Elbit Systems' share price rose 4.2% on Nasdaq yesterday to $37.88, giving a market cap of $1.62 billion, and rose 1.7% in morning trading on the TASE today to NIS 141.40.
Published by Globes [online], Israel business news - www.globes-online.com - on September 8, 2011
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