Two US defence giants ponder Alvis bid

ALVIS IS set to be the subject of intense takeover speculation this week as predators decide whether to launch a bid for the armoured vehicles group.

United Defense Industries and General Dynamics, two US defence manufacturers, are reported to be preparing bids for Alvis. Meanwhile Vickers, the UK engineering firm, also hopes to join the action.

The interest follows last week's merger between Alvis and the Warrior armoured cars division of GKN, the engineering group. The deal heralds the beginning of the long-expected consolidation of the global armoured vehicle industry.

Bidders are interested in Alvis because, following the merger, it will have a strong position in the armoured vehicle market. By taking on GKN's Warrior and Piranha carriers it gains access to a pounds 3bn programme to build battlefield taxis. Vickers was part of a rival consortium which missed out on the contract.

The awarding of the contract is a defining moment in the European armoured vehicle sector, with companies that failed to get any work on the contract forced to merge with other players or exit the industry.

Any takeover would have to gain the approval of GKN, which has taken a 29.9 per cent stake in Alvis as a result of the merger. The stake gives it the power to block any takeover it does not support.

However, the merger will not formally be completed until it is approved by Alvis shareholders in a few weeks' time. This gives other bidders an opportunity to put forward alternative proposals.

United Defense is a privately-owned US group which was created by the merger of two smaller companies four years ago. The group has close links with GKN, as both companies are members of a GEC-led consortium bidding for Project Tracer, the Anglo-American scheme to develop a new hi-tech reconnaissance vehicle.

General Dynamics is a huge group best known for its jet fighter aircraft. It also manufactures the Abrams tank.

News of the American interest is likely to increase the pressure on Vickers. Paul Buysse, the new chief executive of Vickers, has identified defence as one of the group's core activities. However, even though Vickers has a strong position in tanks through its Challenger II vehicle, it lacks the critical mass to compete for projects in its own right.

A shortage of orders was behind Vickers' decision last week to close its Leeds factory with the loss of 1,100 jobs. However, it has a pounds 200m cash pile it could use to make acquisitions.

Alvis makes the Scorpion and Stormer armoured vehicles. The company almost doubled in size last year with the pounds 84m takeover of Hagglunds, the Swedish armoured vehicle manufacturer.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

Day In a Page

Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

Is this the future of flying?

Battery-powered planes made of plastic, and without flight decks
Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

Isis are barbarians

but the Caliphate is an ancient Muslim ideal
The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

Curse of Brink's Mat strikes again

Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

'The ministers talk to us about miracles'

Why Greeks are cynical ahead of the bailout referendum
Call of the wild: How science is learning to decode the way animals communicate

Call of the wild

How science is learning to decode the way animals communicate
Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

'The economic collapse has happened. What is at risk now is democracy...'

If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
The science of swearing: What lies behind the use of four-letter words?

The science of swearing

What lies behind the use of four-letter words?
The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

The Real Stories of Migrant Britain

Clive fled from Zimbabwe - now it won’t have him back
Africa on the menu: Three foodie friends want to popularise dishes from the continent

Africa on the menu

Three foodie friends want to popularise dishes from the hot new continent
Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

Who will fill Donna Karan's boots?

The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'
10 best statement lightbulbs

10 best statement lightbulbs

Dare to bare with some out-of-the-ordinary illumination
Wimbledon 2015: Heather Watson - 'I had Serena's poster on my wall – now I'm playing her'

Heather Watson: 'I had Serena's poster on my wall – now I'm playing her'

Briton pumped up for dream meeting with world No 1
Wimbledon 2015: Nick Bollettieri - It's time for big John Isner to produce the goods to go with his thumping serve

Nick Bollettieri's Wimbledon Files

It's time for big John Isner to produce the goods to go with his thumping serve
Dustin Brown: Who is the tennis player who knocked Rafael Nadal out of Wimbeldon 2015?

Dustin Brown

Who is the German player that knocked Nadal out of Wimbeldon 2015?
Ashes 2015: Damien Martyn - 'England are fired up again, just like in 2005...'

Damien Martyn: 'England are fired up again, just like in 2005...'

Australian veteran of that Ashes series, believes the hosts' may become unstoppable if they win the first Test