General Dynamics has today entered into a definitive agreement to acquire General Motors Defense for $1.1 billion in cash.
General Motors Defense of London, Ontario, is a business unit of General Motors Corporation of Detroit, Michigan. The transaction, which has been approved by the boards of directors of both companies, is subject to normal regulatory approval. It is expected to close by the end of the first quarter of 2003, and would be immediately accretive to earnings.
GM Defense produces wheeled armoured vehicles and turrets. In a joint venture with General Dynamics, GM Defense produces Stryker, the US Army’s transformational combat vehicle. Other GM Defense products include the LAV (Light Armoured Vehicle) for Canada, Australia, New Zealand and Saudi Arabia and the Piranha combat vehicle for a number of international customers. It anticipates 2002 revenues of approximately $950 million, and has a backlog of more than $1.5 billion.
The company has 2,400 employees in four operating units: GM Defense, Delco Systems in Goleta, California; GM Defence, Australia in Adelaide, South Australia; GM Defense, Canada in London, Ontario; and MOWAG Motorwagenfabrik AG in Kreuzlingen, Switzerland.
General Dynamics anticipates no changes to production workforces in any of the GM Defense locations, and will honour all existing labour agreements.
‘GM Defense has been our valued partner on Stryker,’ said Nicholas D. Chabraja, General Dynamics chairman and CEO. ‘This is a company with a strong management team and an experienced workforce.
‘It has important vehicle technology, high quality products, and an established worldwide customer base. The acquisition will enable us to be increasingly responsive to our US, Canadian and worldwide customers.’