L3Harris Technologies has reached agreements to sell three business units from its predominantly military portfolio.
In the Air Traffic Management (ATM) sector, Austrian company Frequentis intends to acquire the voice communication and arrival management product line and the associated business units. A purchase price of €17M was agreed.
The German transmission and drive specialist Renk intends to acquire the Combat Propulsion Systems (CPS) business unit and MagnetMotor GmbH (MM). This agreement provides for a purchase price of €327M with Renk expecting this to increase sales by €230M annually.
Canadian manufacturer of simulation systems CAE has agreed to acquire the military training business unit with the shares Link Simulation & Training, Doss Aviation and AMI, thus complementing its core business. The purchase price was stated to be €1.2Bn and CAE’s annual turnover is expected to grow by approximately €410M.
L3Harris Technologies ranks 9th in Defense News’ top 100 companies with 2019 annual defence sales of €11.4Bn. The combined sales of the divisions sold amount to around €670M (5.8 per cent).
In the case of CAE and Renk, the sales potential from the acquisition is about 40 per cent of annual sales in 2019. With the acquisition, the companies not only acquire know-how and manufacturing capacities but also a (further) base in the USA. This brings advantages in terms of participation in defence programmes of the US Armed Forces.
Approvals from the authorities of the respective countries are required for the agreements to take legal effect. The companies expect the acquisition agreements to enter into force in the second half of 2021 after all closing conditions have been met.