Finmeccanica and EADS are interested in acquiring US defence electronics group DRS Technologies.

According to sources close to the matter, Finmeccanica has made an offer –reportedly worth € 3.5Bn- to acquire DRS Technologies. The Italian group, which is said to be waiting for an answer from DRS’ board, declined to comment. Other industry players look at DRS with interest, including EADS. Ralph Crosby, CEO of EADS North America, confirmed on Friday that “we are seriously watching this case”, adding the company particularly sought to expand into the electronics sector and to pursue mid-size acquisitions. “We are interested in a strong presence in the US”. Asked to comment about possible talks between DRS and Finmeccanica, Mr Crosby said he did not think the two groups had reached an agreement yet. Cited by the Wall Street Journal Europe, Nick Cunningham, an analyst at London-based Evolution Securities, said the ongoing talks with DRS will “test the limits of what a non-Anglo-Saxon defence contractor can buy in the US”. In a comment piece in Financial Times, columnist Paul Betts writes that “Finmeccanica outwits EADS with Tuscan tactics”, pointing at the determined and direct approach of the Italian group’s CEO, Pier Francesco Guarguaglini. While Mr Guarguaglini successfully streamlined and refocused Finmeccanica, EADS has remained “shackled to its bureaucratic Franco-German heritage”. He also reinforced the Italian group’s presence in the UK, which has provided a bridgehead to the biggest defence market, the US. Meanwhile, claims Mr Betts, EADS has struggled to build a “convincing” defence presence. With the acquisition of DRS, Finmeccanica would “steal a real march” on EADS and other European rivals. Reuters (12/05), Les Echos, Le Figaro Economie (12 & 13/05), Handelsblatt, Suddeutsche Zeitung, Financial Times, The Wall Street Journal Europe