History
Until 2004 BAE Systems was a relatively small player in the land systems industry, however following the 2004 purchase of Alvis Vickers, the 2005 acquisition of United Defense and the acquisition of Armor Holdings in 2007 it is now the largest land systems defense contractor.
BAE Systems was formed in 1999 by the merger of British Aerospace (BAe) and Marconi Electronic Systems (MES). BAe's land systems business was RO Defence, a major manufacturer of explosives, ammunition and small arms. MES owned Vickers Shipbuilding and Engineering Ltd, manufacturer of the M777 howitzer.
On June 4, 2004 BAE Systems outbid General Dynamics for Alvis plc, the UK's principal land systems business. What had seemed a certain win for the US company was stopped by BAE Systems' surprise move. It has been seen as an attempt to keep such a strong competitor at bay in BAE Systems' "backyard." Alvis and BAE RO Defence were merged as BAE Systems Land Systems. When Dick Olver was appointed Chairman of BAE Systems in July 2004 he ordered a review of the company's businesses which confirmed the attractiveness of the land systems sector. This shift in strategy was described as "remarkable" by the Financial Times. On March 7, 2005 BAE Systems announced the $3.974 billion acquisition of United Defense Industries (UDI). UDI, a major competitor to General Dynamics, was primarily a land systems manufacturer, boosting BAE Systems' involvement in this sector and its sales in the important North American market. UDI manufactured combat vehicles, artillery systems, naval guns, missile launchers and precision guided munitions.
BAE Systems Land and Armaments was formed in June 2005 in a reorganisation of BAE's businesses. Land and Armaments, headquartered in the United States as part of BAE Systems Inc, took control of BAE's existing land systems businesses.
Land and Armaments has received regular contracts for the "reset" of Bradley armoured fighting vehicles. By August of the financial year 2006 BAE had received contracts totaling $477.9 million.
In July 2009 BAE failed to win the $1.06 billion MRAP All Terrain Vehicle (M-ATV) contract which will see 2,244 vehicles produced for the US Marine Corps. In September 2009 BAE lost a larger contract, the first stage of a multibillion-dollar follow-on order for up to 23,000 trucks as part of the Family of Medium Tactical Vehicles programme. Despite a successful appeal forcing the US Army to reevaluate the bids, Oshkosh Corporation was confirmed as the winner of the £2.3 billion ($3.7 billion) contract in February 2010. BAE announced a £592 million writedown of the former Armor Holdings business as a result.
Read more about this topic: BAE Systems Land & Armaments
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