VT Group sells 45% stake in BVT Surface Fleet to BAE Systems

Fri. October 30, 2009; Posted: 02:09 PM

Oct 30, 2009 (Datamonitor Financial Deals Tracker via COMTEX) -- BAESF | Quote | Chart | News | PowerRating -- VT Group plc, a defense and civil contractor, has sold its 45% stake in BVT Surface Fleet Limited to its joint venture partner BAE Systems plc, a developer of advanced defense and aerospace systems. All the companies are based in the UK.

Update on September 24, 2009:

VT Group has signed a legally binding agreement to sell its 45% stake in BVT Surface Fleet to BAE Systems for a cash consideration of GBP346 million.

VT Group will also inject GBP43 million of capital into BVT Surface Fleet in settlement of certain other matters, including claims in respect of certain export contracts which were contributed by VT Group into the BVT Surface Fleet business. In addition, VT Group will pay a further GBP4.7 million to BVT Surface Fleet in respect of certain inter-company balances. The capital injection and the inter-company payment will take place at completion of the transaction.

The transaction is expected to complete by the end of October 2009.

Announcement (January 28, 2009):

VT Group has agreed to sell its 45% stake in BVT Surface Fleet to BAE Systems for a minimum of GBP380 million.

BVT Surface Fleet was established as a 45:55 surface warship building joint venture between VT Group and BAE Systems in early 2008. Under the terms of the joint venture, VT Group held the right to exercise an option that would allow BAE to acquire the remaining stake in the venture, if the government approved the transaction.

VT Group expects to exercise its put option by July 1, 2009. Pursuant to this transaction, BVT Surface Fleet will operate as a wholly-owned subsidiary of BAE Systems.

Bank of America Merrill Lynch is acting as financial advisor to VT Group and Freshfields Bruckhaus Deringer LLP is acting as legal advisor to BAE Systems on the transaction.

Deal Value (US$ Million) 567.32
Deal Type                Acquisition
Sub-Category             Minority Acquisition
Deal Status              Completed: 2009-10-30

Deal Participants

Target (Company)   BVT Surface Fleet Limited
Acquirer (Company) BAE Systems plc
Vendor (Company)   VT Group plc

Deal Rationale

The sale would allow VT Group to refocus exclusively on expanding its core engineering-based support service offerings.

% Acquisition 45%

For full details for BAESF click here.

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