BAE Sells Remaining Stake in Saab, Ending 13-Year Investment
BAE Systems Plc (BA/), Europe’s largest defense contractor and a maker of the Eurofighter warplane, is selling its remaining stake in Saab AB (SAABB) for about $253 million, ending a 13-year investment in the Swedish weapons maker.
BAE is selling 11.2 million shares at 139.5 kronor apiece, according to a term sheet sent to clients and obtained by Bloomberg News. The sale completes BAE’s gradual withdrawal from Saab, maker of the Gripen fighter plane.
BAE first bought 35 percent of Saab in 1998 for 3.5 billion kronor, about $450 million at the time, when the two were already partners in selling the Gripen. BAE began unwinding its Saab holdings in 2005, selling 13.2 million shares as it sought to reorganize international ventures to fund acquisitions in the U.S. Last year, it sold half its 20.5 percent stake to Investor AB, the Wallenberg family’s publicly traded holding company, saying it would sell the rest later.
“They decided some years ago that Saab is redundant for them, as they shifted their focus to the U.S.,” said Zafar Kahn, an analyst at Societe Generale in London, who has a “hold” rating on BAE stock. “It is a good time to sell since the Saab share price recovered.”
Saab shares have gained 35 percent in the past 12 months. Today they plunged as much as 8.2 percent to 136.8 kronor, the biggest intraday drop since October. They traded at 137.3 kronor as of 11:27 a.m. in Stockholm, giving Saab a market value of 15 billion kronor ($2.43 billion). BAE shares declined 1 percent to 320 pence.
BAE, which also makes Astute submarines and Excalibur artillery shells, is targeting new arms markets and building up civil-industry sales as Britain shrinks its defense budget. BAE is already among the top 10 defense contractors in the U.S.
An external BAE spokeswoman declined to comment.
To contact the reporter on this story: Andrea Rothman in Singapore at aerothman@bloomberg.net Alexis Xydias in London at axydias@bloomberg.net
To contact the editors responsible for this story: Benedikt Kammel at bkammel@bloomberg.net; Maria Ermakova at mermakova@bloomberg.net
Rate this Page