Canada & Holland Order 17 SIRIUS Shipboard Long-Range Infa-Red Sensors (updated)

RNN De Zeven Provincien
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The Canadian Department of National Defence (DND) and the Royal Netherlands Navy have ordered 17 SIRIUS Long-Range Infrared Search and Track (LR-IRST) Systems for a total of $142 million. The Canadian Commercial Corporation in Ottawa, Ontario, Canada issued the contract on behalf of both parties, which calls for installation on all 12 of Canada's FFH Halifax Class multi-role frigates, plus a land based combat trainer; the Netherlands is ordering another four systems for installation on their LCF De Zeven Provincien Class air defence and command frigates, bringing the grand total to 17 systems. The contracts also include logistic services and the supply of spare parts.

SIRIUS was jointly developed by DRS Technologies and Thales Naval Nederland, and was designed to be especially useful in the expeditionary combat domain and littorals, where the risk of asymmetric threats like fast suicide attack boats remains high...

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Reports & Analysis: BAE in Talks to Sell Its 20% Stake in EADS Airbus (updated)

Both BAE Systems and EADS have confirmed that BAE has initiated a discussion on the potential disposal of BAE Systems' 20% stake in Airbus." Negotiations were described as being in "the very early stages"; BAE's 20% holding is valued at EUR 3.5 billion ($4.3 billion) in EADS's books, but The Scotsman newspaper noted that analysts expect any sale to be worth GBP 3.0-4.5 billion ($5.2-7.8 billion at current conversion). EADS adds that the initiation of these discussions does not represent an exercise of the put option held by BAE Systems in relation to this stake.

More details regarding the potential deal, its military procurement significance, and some analysis regarding both its strategic implications and BAE's future options can be found below....

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Thales UK Finalizes GBP 10M Agreement to Produce Swedish NLAWs

RB 57 NLAW

An earlier DID article noted Britain and Sweden's SEK 4 billion contract for RB 57 NLAW, Next Generation Light Antitank Weapon (NLAW) rockets in 2002, and the Swedish Materiel Administration's SEK 500 million (GBP 36.3 million) order in 2005. As a follow-up to that order, Thales UK has just signed a GBP 10 million ($17.5 million at current conversion) export contract with Saab Bofors Dynamics for NLAW missile assembly.

In our last post describing the NLAW, we noted that final assembly will take place at Thales Air Defence in Belfast. The missiles will be assembled and tested in its high volume production line, using capabilities and expertise gained through similar missile programs such as the anti-air Starstreak and VT1, and the Hellfire anti-armor missile. Thales UK's Basingstroke facility is also a key member of Team NLAW, assembling the center electronic package and Optical Sensor. As Thales somewhat awkwardly puts it: "The agreement with Saab Bofors Dynamics ensures that Thales UK will be responsible for the manufacture of export of the NLAW system for the foreseeable future." In Britain, the system is known as MBT-LAW.

Thales Turns in FY05 Results, Prepares to Make Acquisitions

French defense electronics group Thales announced a modest 2.5% rise in net profit for 2005 to EUR 334 million, while announcing plans to go on the offensive in foreign markets with a EUR 1 billion ($1.19 billion at current conversion) fund for acquisitions. In its news release, Thales noted that its "ambition, as compared to its current position, is to achieve, by 2008, a 25 percent growth in revenues, 15 percent from organic growth and the remainder through acquisitions".

The firm may already have begun. In December, DID covered Thales' deal with French state-owned naval shipyards DCN, giving it a 25% stake in the company (note that Thales is itself 31.3% owned by the French state). The company also revealed its intention to buy the 50% of Australia's ADI recently, conditional on the approval of Australia's Foreign Investment Review Board (see ADI release, PDF format). This would complete its takeover of Australia's largest military manufacturer, and extend the firm's drive to expand its Pacific Rim operations and sales.

Australia Spending A$ 100M on New Naval Networking

HMAS Anzac
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The Australian Defence Force's ability to successfully conduct maritime operations is highly dependant on the exchange of operational information between ships, aircraft and land units. To make that goal more of a reality, the Australian government recently announced a pair of initiatives that will spend A$ 100 million to modernize communications aboard a number of its vessels. Technical priorities will include transitioning to packet-based switching (IP) networks, wide-area networking, and improved satellite communications.

The government notes that this move is a significant step in its modernization plan towards Network-Centric Warfare (NCW) capability. These projects will allow deployed ships to establish computer-based wide area networks at sea via broadband satellite communication et. al., allowing Navy to rapidly move information around its ships, share tactical information, communicate with headquarters and allies, and improve quality of life provisions for sailors by improving their email and internet access capabilities so they can stay in touch with loved ones.

So, what are the projects, what's going on, what kind of follow-up buys are expected, and which vessels are affected? DID has answers...

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Belgium Selects Pirahna IIIs for $850M APC Contract, Controversies Ensue

Endangered Leopard
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In DID's July 2005 article covering Belgium's impending defense purchases, we noted that country's Armoured Infantry Vehicle (AIV) program to replace its 132 Leopard 1A5BE main battle tanks, as well as its AIFV and M113 armored personnel carriers, with wheeled APCs. The contract was valued at up to EUR 800 million (about $1 billion) for 242 vehicles, in 7 separate versions that would include troop transport, combat engineer, commando, ambulance and logistic support missions. We also noted that a contract would "probably be awarded by the early months of 2006."

Now a winner has just been selected from among the finalists (GD-Steyr's Pandur II, GD-MOWAG's Piranha III/LAV III, Iveco's Centauro, and Patria's Armored Modular Vehicle), a contract has been signed with Elbit for electro-optics and a 30mm remote weapons system - and a pair of controversies are brewing, plus a related DID article we can only describe as "Dude, Where's My Pandur?"

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UK Defence Committee Continues Questions RE: CVF, F-35 (updated)

CVF Alliance Design
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DID has put together a focus briefing on the British CVF future carrier program, and covered both its growing ITAR-related quarrel with the USA and the potential for a British pullout from the F-35 Joint Strike Fighter Program. From the UK House of Commons Defence Committee release:

"Providing the Navy with the 'carrier strike' capability is expected to cost some GBP 31 billion (whole life costs), including some GBP 12 billion of procurement costs. The key programmes are the two new aircraft carriers and up to 150 new carrier borne aircraft - the Joint Strike Fighter [DID: F-35B STOVL]. It is possible that neither the carriers nor the aircraft will be delivered on time, or, crucially, at the same time, and the Committee says MoD and the Royal Navy must make plans for bridging any gap that may emerge....

On the aircraft, the programme is being led by the US. It has experienced problems which must be monitored closely. The Committee is concerned that the UK should get all the information and access to technology from the US that it requires to have 'sovereign capability' - the ability to maintain the JSF aircraft and undertake future upgrades independently. If not, the UK might need to look at other aircraft to operate from the carriers...."

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2 FRES Vehicle Survivability Contracts to Thales, Boeing, Lockheed

He had it first

The USA isn't the only country thinking about lighter armors and advanced defense systems for its vehicles. Yesterday, DID covered a pair of chassis-related technology deminstration programs for Britain's proposed FRES family of armored vehicles. The UK Ministry of Defence issued 4 contracts, however, and the other two were all about survivability.

Specifically, the FRES Integrated survivability program. "Integrated survivability" is a combination of vehicle design (stealth, shape, layout), sensors, armor, and active defensive systems inside and out. In this case, it also includes something called "electric armor."

Yes, you read that right...

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ThyssenKrupp & EADS Beat Thales et. al. to Acquire Atlas Elektronik

In a recent DID article covering the 'merger' of Thales Naval France into DCN, DID noted Thales' bid for Bremen-based naval electronics firm and sonar specialist Atlas Elecktronik. Thales took great pains to insist that this naval merger did not make Thales' naval business a creature of the French government, as German domestic political considerations were hindering the firm in its efforts to acquire Atlas from BAE Systems. There were even rumours that Thales was trying to entice a joint bid from ThyssenKrupp, a defense systems integrator and customer of Atlas Elektronik who is also an important builder of surface warships and submarines (as HDW) for the German Navy and others.

If so, Thales failed. ThyssenKrupp Technologies and EADS signed an agreement with BAE Systems on December 30, 2005 for the joint acquisition of Atlas Elektronik. In accordance with the agreement, ThyssenKrupp Technologies will hold 60% of Atlas and EADS 40%, creating a new "Maritime Electronics House." Financial details remain undisclosed, but Thales was rumored to be offering EUR 300 million, while EADS-ThyssenKrupp were rumored to be offering EUR 250 million.

So, what does this mean? Perspectives vary.

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SEK 500M Order from Sweden for RB 57 NLAW

RB 57 NLAW

Following joint development between the United Kingdom and Sweden, the Swedish FMV defense procurement agency placed a SEK 500 million (about $63 million) purchase order with Saab Bofors Dynamics for the RB 57 NLAW. NLAW was developed in Sweden and will be produced in the United Kingdom, where it is known as MBT-LAW. A number of British subcontractors are involved in production, and final assembly will take place at Thales Air Defence in Belfast. This order is for series production and delivery for the Swedish Armed Forces.

In the summer of 2002 the Swedish FMV and British Defence Procurement Agency (DPA) ordered development of NLAW for the United Kingdom and Sweden, plus series production and delivery for the British Armed Forces. The order was worth approximately SEK 4,000 million (about $430 million at the time), beating out the Predator/Kestrel from Lockheed Martin, MBDA and Insys.