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AgustaWestland Wins First Wildcat Export Deal With South Korea

Jan. 15 (Bloomberg) -- Finmeccanica SpA’s AgustaWestland has won a first export order for the AW159 Wildcat after South Korea said it would buy eight of the helicopters to strengthen its navy’s ability to combat ships and submarines.

South Korea will receive four Wildcats in 2015 and four more in 2016 under a 589 billion won ($560 million) deal, the government’s Defense Acquisition Program Administration said in a statement. A team of United Technologies Corp.’s Sikorsky helicopter arm and Lockheed Martin Corp., offering the MH-60R used by the U.S. Navy, was the losing bidder, DAPA said.

AgustaWestland and its U.S. rival are battling over one of the hot markets for military exports as countries from Europe to Asia look for ways to improve their ability to protect vital sea lanes. South Korea has had several naval standoffs with North Korea in recent years, driving interest in strengthening its defenses.

“The maritime helicopter will be able to carry out a variety of missions,” DAPA spokesman Baek Youn Hyeong told reporters in Seoul. “It expands our capabilities against suspicious enemy ships and submarines,” and can be used for anti-terrorism operations, he said.

U.S. bidders in South Korea often have an advantage because of the close military alliance between the countries. In terms of interoperability, often a deciding factor in South Korean competitions, the MH-60R scored better than the Wildcat, said Kim Seung Bok, director of maritime aircraft. However, the Wildcat offer was more compelling overall, he said.

Operational Suitability

The AW159 came out ahead on cost, operational suitability and other contractual elements, Baek said. Negotiating industrial and technology returns that AgustaWestland will deliver to South Korea delayed the contract announcement, he said.

AgustaWestland was the incumbent in South Korea, which has already bought 25 Lynx helicopters, an earlier model. The Wildcat will provide greater range and lift capability than the model now in service, Kim said. The helicopter is powered by two LHTEC CTS 800 engines built by a joint venture of Rolls-Royce Holdings Plc and Honeywell International Inc.

The commitment is a boost for the Italian helicopter maker after the MH-60R ousted the Lynx in Denmark last year. The MH-60R also won a deal in Australia.

The U.K. is lead customer for the Wildcat, with plans to field 34 for the army and 28 for the Royal Navy. The first Wildcats were delivered to the British military last year.

The AW159 and MH-60R are squaring off in several other markets, particularly the Middle East where Saudi Arabia, Qatar, and the United Arab Emirates are considering purchases. Malaysia also may add a maritime helicopter purchase to its next defense plan.

To contact the reporters on this story: Robert Wall in London at rwall6@bloomberg.net; Sangwon Yoon in Seoul at syoon32@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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