UPDATE: BAE Systems Says it Will Dispose Of Saab AB Stake
http://english.capital.gr/NewsPrint.asp?id=920192
Friday, 5 March 2010 - 12:10
By Jonathan Buck
Of DOW JONES NEWSWIRES
LONDON -(Dow Jones)- U.K. defense giant BAE Systems PLC (BA.LN) Friday disclosed it was selling its 20.5% stake in Swedish defense group Saab AB (SAAB-B.SK), maker of the Gripen jet fighter, in a deal potentially valued at $300 million.
Farnborough, England-based BAE Systems, the biggest shareholder in Saab, said in a statement that it will sell half its stake to Sweden's Investor AB for 1.07 billion Swedish kronor ($150 million) and signaled its intention to dispose of the remainder in due course through a market placing. A spokeswoman at BAE Systems couldn't say when that would be.
Investor, an industrial holding company founded by the Wallenberg family, already holds a 19.8% stake in Saab, so the addition of another 10.25% will boost its holding to about 30%. Another 8.8% of Saab's stock is owned by Wallenberg foundations. Marcus Wallenberg, a member of the Wallenberg family, is chairman of Saab.
BAE Systems acquired a 35.1% stake in Saab in its initial public offering in 1998, three years after the two companies established a joint venture to explore and develop export opportunities for the Gripen. Saab in 2004 assumed full responsibility for its Gripen export campaign, and BAE reduced its stake in Saab to 20.5% the following year.
The U.K. company, which makes fighter aircraft, tanks and armored vehicles and builds warships, regularly assesses the strategic value of its investments, the BAE Systems spokeswoman said. Those investments include, among other things, a 49% stake in Kazakhstan's Air Astana and a 37.5% stake in MBDA, a European manufacturer of missiles and missile systems.
The sale comes at an uncertain time for Saab. President and Chief Executive Officer Ake Svensson last month announced his resignation and the Stockholm-based company currently is looking for a replacement. Its earnings before interest, tax, depreciation and amortization in 2009 jumped to SEK2.60 billion from SEK1.52 billion in 2008 as sales soared to SEK24.65 billion from SEK23.80 billion.
However, the company, which employs 13,159 workers, saw its order bookings in 2009 shrink to SEK18.43 billion from SEK23.21 billion in 2008.
"BAE Systems has been a good partner for Saab AB, but over time there has been less alignment of interests and the emergence of some overlapping businesses, while Saab AB has built a strong internal export capability," said Investor Chief Executive Borje Ekholm.
"We have pursued the opportunity to increase our ownership at what we view as an attractive price, in line with our communicated strategy to strengthen our position in selected core investments," he added
Investor owns stakes in some of Sweden's biggest industrial, financial and telecommunications companies, including Electrolux AB (ELUX-B.SK), L.M. Ericsson Telephone Co. (ERIC), Skandinaviska Enskilda Banken AB (SEB-A.SK), Atlas Copco AB (ATCO-A.SK) and Husqvarna AB (HUSQ-B.SK).
At 0928 GMT, BAE Systems shares traded up a penny, or 0.1%, at 386 pence. In Stockholm, Saab's shares traded up SEK5.75, or 5.5%, at SEK111.25 and Investor's shares traded up SEK0.50, or 0.4%, at SEK131.60.
Saab and the passenger-car maker of the same name were separated in 1990.
-By Jonathan Buck, Dow Jones Newswires; +44 (0)207 842 9237;
jonathan.buck@dowjones.com
(Karl Bruze in Stockholm contributed to this article.)
(END) Dow Jones Newswires
March 05, 2010 05:10 ET (10:10 GMT)
Copyright (c) 2010 Dow Jones & Company, Inc.
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