Finmeccanica buys DRS for $5.2 billion - Business

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MILAN (Reuters) - Finmeccanica SpA has agreed to buy U.S. military contractor DRS Technologies Inc. in a $5.2 billion deal, the biggest so far in European defense contractors' bid for a slice of the growing U.S. defense market.

By Ian Simpson
MILAN (Reuters) - Finmeccanica SpA (SIFI.MI) has agreed to buy U.S. military contractor DRS Technologies Inc. (DRS.N) in a $5.2 billion deal, the biggest so far in European defense contractors' bid for a slice of the growing U.S. defense market.
Shares in the Italian aerospace and defense group gave up early gains and were down 3.09 percent at 20.70 euros by 4:38 a.m. EDT (0738 GMT). Milan's blue-chip S&P/MIB index was off 0.55 percent.
Finmeccanica also announced on Tuesday its first-quarter results and plans to buy into an Italian electronics company.
For the DRS deal, Finmeccanica, Europe's No. 4 aerospace and defense group by market value, said it would pay $81 a share in cash for DRS, a Parsippany, New Jersey, maker of radar and surveillance equipment.
Its price includes about $1.2 billion in net debt held by
DRS.
Finmeccanica executives are scheduled to outline the deal at a 9:00 a.m. EDT (1300 GMT) presentation to analysts in London.
Finmeccanica, which is 34 percent owned by the Italian state, will pay for the purchase through a loan to be repaid through a capital increase, a bond issue and an asset sale.

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