BAE guns for Koch sell-off

BAE Systems has put Heckler & Koch, its German firearms business, up for sale.

Three years ago, BAE Systems entered talks about selling the company to Colt, the American gun manufacturer, but these came to nothing. The proposed disposal comes at a time of rising pressure on gun manufacturers, globally.

Stephen Henwood of BAE Systems said: "Many countries are tightening their gun laws following the massacres in Erfurt, Germany, and Littleton in the US."

Moreover, victims of unlawful shooting in the US are increasingly resorting to litigation against the weapons' manufacturers.

"A specialist company is better able to cope with these sorts of business risks," Mr Henwood commented.

Such pressures forced Tomkins, the UK conglomerate, to sell Smith & Wesson, the US gun maker, for $15m (£10m) plus debt repayment in 2001. This resulted in a book loss of £66m.

The value of Heckler & Koch, which is based in south-west Germany and currently employs 500 people, is unclear. BAE Systems acquired the company 11 years ago.

"It is a profitable business that is very much at the top end of the gun market. It has been thought for some time that it does not form part of our strategy," commented Phil Soucy, a BAE spokesman.

Heckler & Koch supplies both private individuals and Nato armed forces with high- quality weapons, exporting machine guns, hand guns, grenade launchers and rifles.

Within Nato, German and Spanish armies use the G36 rifle. Heckler & Koch also supplies special forces such as the SAS and its German equivalent, GSG-9, with handguns and machine guns.

The MP5, frequently used by special forces, has become the world's most popular submachine gun, while the HK P7 is one of the world's most famous handguns. The Mark 23 handgun is used by the US Navy Seals and US Army Special Operations Command.

With the decision to sell Heckler & Koch, BAE Systems is showing its determination to concentrate "on hi-tech weapon systems", according to Mr Henwood.