BAE Systems (LSE:BA) and Northrop Grumman (NYSE:NOC) are jointly bidding against the joint bid by Elbit Systems (Nasdaq: ESLT; TASE:ESLT) and Thales Group (Paris:TCFP) subsidiary Racal Electronics in the $1.3 billion UK unmanned aerial vehicle (UAV) tender.
The joint BAE Systems-Northrop Grumman bid could reduce Elbit Systems’ chance of winning the tender, after reaching the final selection stage a few days ago. BAE Systems had earlier dropped out of the tender, and was excluded from the final list of participants announced in London last week.
Northrop Grumman’s joining BAE Systems is consequential, since the British Ministry of Defence aims at giving the contract to a British company.
Northrop Grumman includes UK-based Northrop Grumman Europe and General Dynamics UK. The British UAV tender is one of the largest currently UAV tenders in the world.
Elbit Systems is offering UAVs built by its Silver Arrow subsidiary. The winner of the tender will probably be announced in late 2003. Under the “Watchkeeper” program, the British Army will replace obsolescent UAVs for tactical intelligence gathering and dissemination, surveillance, and target acquisition for ground and air units. The Watchkeeper program’s timetable calls for delivery to begin 2005-06.
Silver Arrow and Racal Electronics are offering the British Army two UAVs: Hermes 180, for tactical missions; and Hermes 450.
In addition to the UAV tender, a second Elbit Systems subsidiary, El-Op Electro-Optics Industries is bidding for the UAVs’ visual and observation systems.
UAVs account for 45.5% of Elbit Systems’ sales. The company sold $372 million worth of UAVs in 2002, and estimates this year’s sales will reach $399 million.
Published by Globes [online] - www.globes.co.il - on February 16, 2003