Hummer News
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The British arms firm BAE has been given approval by US regulators to go ahead with takeover of an American military company.
There had been speculation that the deal could have been held up because of bribery allegations leveled at BAE. But the regulator, the Committee on Foreign Investment in the United States, has decided against launching a full-scale investigation into BAE's planned purchase of Armor Holdings, which makes armour for the Humvee military vehicle and bulletproof vests. BAE Systems is shrugging off concerns about the US fallout from corruption allegations involving Saudi Arabia and driving deeper into the huge American defence market.
Armor provides armour plating for the Humvee and uS Soldier Vests.
A successful takeover would increase turnover in the US and catapult BAE into sixth place in the Pentagon's list of major suppliers of military hardware.
Walt Havenstein, chief executive of BAE's operations in the US, is confident of winning regulatory approval, but in some quarters the deal will be seen as a fresh test for the Bush administration over the sale of important military suppliers. It will also show whether the British company has been tarnished by Saudi Arabian corruption allegations.
The British Government's decision to drop a Serious Fraud Office investigation into BAE's huge Al-Yamamah defence contract has been reflected in diplomatic protests. There are suggestions that the US Justice Department is ready to mount its own investigation.
BAE believes that its record in the US provides strong proof that the Pentagon will welcome its latest expansion. Since 1999, BAE has made 15 acquisitions in the US without disturbing US authorities and informal soundings suggest that the Armor deal is unlikely to meet opposition.
BAE has been trying to hammer out a deal with Armor for several months, although there is uncertainty over whether the US group made the first approach.
Armor, reinforces BAE's attempts to build a powerful position in the military vehicle and armour systems business but brings a touch of scandal.
BAE says the acquisition will be immediately earnings enhancing and, ahead of tomorrow's annual meeting, says that despite the weakness of the dollar and the impact on its US operations it is anticipating a "further year of good growth", particularly from UK contracts.
Mike Turner, chief executive of BAE, said: "The combination of Armor Holdings with BAE systems' existing land systems business, will strengthen our capabilities to the benefit of the US and UK armed forces and their international allies."
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BAE Given Approval by US to purchase American Armor Co - 
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