Analysis: European defense contracts

BRUSSELS, Aug. 11 (UPI) -- Fincantieri buys part of Manitowoc

Italy's Fincantieri and Manitowoc, which is Wisconsin-based, have announced an agreement over the sale of Manitowoc's maritime element to Fincantieri and Lockheed Martin.

As part of the deal, Marinette Marine, which produces the Littoral Combat Ship for Lockheed Martin, will change hands in the deal, which reportedly is worth $120 million, according to the announcement.

Fincantieri, which is also a shipbuilder, thus has acquired the Marinette (Wis.) Shipyard as well as other infrastructure in Sturgeon Bay, Wis., and Cleveland.

The USS Freedom -- an LCS -- is currently under contraction in the Marinette yard and is undergoing sea trials. Several sources point out that if the deal is cleared by government instances, both builders of the LCS will be owned by foreign companies, since the other firm involved is Austal USA, an Australian company, working for General Dynamics.

India renews Mirage maintenance contract with Dassault

India, whose 25-year maintenance deal on its Mirage 2000-H combat aircraft with Dassault in France expired last year, at long last has renewed the contract. The six-month delay was caused by a persisting disagreement between the two sides.

The Indian Defense Ministry and Dassault had bickered over whether liquidated charges would be calculated at 0.5 percent of the total contract value per month or per week. The Defense Ministry had demanded the latter; Dassault the former.

Had the status quo been maintained, half of the Indian air force's 46 Mirages would have been grounded indefinitely. Dassault was threatening a lawsuit which would have kept the aircraft grounded for a long time. India finally caved in earlier this month.

German officials dispute Pentagon account on UAV sale

The German air force is not in the market for five unmanned combat aircraft, the way the Defense Security Cooperation Agency claimed in a report to the U.S. Congress last week, the German Defense Ministry told several news outlets last week.

According to the reports, the German air force was to buy the Reaper, a hunter-killer unmanned aerial vehicle, which can carry four Hellfire missiles and two 500-pound laser precision bombs. The Reaper currently is being used in Iraq and Afghanistan by U.S. troops.

The reports further claimed that Italy would be purchasing four units of the same Reaper UAV and that the countries were hoping to expand interoperability with U.S. troops and provide their servicemen with the same level of safety the Americans have.

A standard deal for five Reaper UAVs and a year of maintenance usually would go for about $200 million.

BAE business volume soars in first half of 2008

Thanks to a monster growth in BAE Systems' Land and Armaments division, which increased its sales from $2.33 billion in H1 last year to just over $5 billion in the first half of this year, BAE has seen its first half-year revenue increase by 12 percent, as compared to last year's H1, Defense News reports.

The armored vehicle sales spike, aided by the Afghanistan and Iraq operations, has now helped BAE establish itself as a major player on the APV market. A rise in Mine Resistant Ambush Protected vehicle demand also helped boost the numbers.

Another factor in the Land and Armaments division's growth was the acquisition last year of the U.S. company Armor Holdings, which yielded $2 billion, thus accounting for virtually all of the progress made.

Since 2004, the acquisitions of Alvis in Britain and United Defense and Armor Holdings in the United States have helped the division multiply its land systems sales by 10.

BAE Systems will be operating under a new CEO starting in September after Mike Turner's six-and-a-half-year tenure ended last week.

BAE expects its volume of business in the second half of this year to eclipse its H1 results in the first half of the year. The company says it already has almost $80 billion worth of backlogged orders on the books.