BAE Systems has made the decision to sell of its South African division, BAE Systems Land Systems South Africa (LSSA), which is being bought by state owned arms company Denel.
BAE Systems and Denel today signed an agreement to proceed with the sale, valued at R855 million ($79.85 million), which is anticipated to conclude during the fourth quarter of this year after receiving regulatory and other approvals, BAE Systems Land Systems SA announced in a statement. Until the sale goes through, LSSA will continue with business as usual.
“This proposed sale will further shape our portfolio around our core capabilities in tracked, combat and amphibious vehicles and weapon systems, which represent markets where we possess strong franchise positions and discriminating capabilities,” stated Erwin Bieber, president of BAE Systems, Inc.’s Platforms & Services sector.
“We also recognise that the LSSA employees have made a significant contribution to BAE Systems over the last 10 years, and we believe that transitioning ownership to Denel will better position the LSSA business to achieve its full potential working with a strong South African company.”
The transaction includes sale by BAE Systems of its 75% interest in LSSA, as well as sale by DGD Technologies (2001) Proprietary Limited of its 25% stake in LSSA as LSSA is a joint venture between the two companies.
LSSA has comprised three business segments employing approximately 500 people. The LSSA business specialises in the design and manufacture of military tactical-wheeled vehicles, mechanical driveline products, precision-machined components and gears, fire directing systems, and remote weapon launching platforms, subsystems and products.
Riaz Saloojee, Chief Executive Officer of Denel said, “This proposed acquisition is in line with our company’s strategy to broaden our leading land system solutions through the addition of resources and assets, such as those of LSSA, which complement our capabilities in the design and integration of combat turrets, artillery and infantry systems and armoured vehicles.”
LSSA already works with Denel, supplying commander and gunner sights for the Badger 8×8 infantry fighting vehicle being developed by Denel Land Systems for the South African Army.