PDF-formatted copies of the report, detailing the top 25 transactions in the first half of 2000, can be obtained at no charge from the DM&A website. To download the report -- and to set up a free two-week evaluation of the full DM&A service -- go to http://www.infobasepub.com/ and then click the "Trial Evaluation" tab.

"In the U.S., the defense industry's consolidation is moving into a third phase," said Stuart McCutchan, editor of Defense Mergers & Acquisitions. "The Pentagon has clamped down on consolidation among the defense industry's primes, and the consolidation activity which produced the new breed of beefier aerospace suppliers -- the Honeywell Internationals, BFGoodrichs, and Hamilton Sundstrands -- has also largely run its course.

"The third phase could be described as fine-tuning -- an ongoing process by which companies buy and sell properties with an eye toward improving margins and operational focus. For instance, each of the Big Three in the U.S. is now engaged in selling properties gained from their previous merger activity." While the value of deal-making is down from the $59 billion in the comparable period in the first half of 1999, the number of middle-market deals (in the $250 million - $1 billion range) actually increased. These are the kinds of deals that will be with us for years to come."

"Events in Europe are not as far along," said McCutchan. "Creation of the European Aeronautic Defense & Space Co. (EADS) this month is analogous to Boeing's acquisition of McDonnell Douglas, which took place three years ago. However, the Europeans say they have profited from the lessons of the American mega-deals, and that they will bring their companies to their full potential faster than has been the case in the U.S. Whether that is the case -- or whether circumstances unique to Europe conspire against BAE Systems and EADS - - remains to be seen."

Five major trans-Atlantic deals took place in the first half of 2000, and a sixth -- the BAE Systems acquisition of Sanders -- was announced on July 13. The DM&A service looks for an increase in such activity, due in large part to national efforts to remove the regulatory and security impediments to cross- border consolidation.

The Defense Mergers and Acquisitions service comprises the comprehensive monthly DM&A newsletter, and an online service which includes daily reports and analysis of industry activity, along with access to the DM&A Database -- a complete record of M&A activity in the defense, aerospace and government contracting markets since 1989.

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US Skeptical of N.Korean Offer To Turn Missiles Into Spaceships
Thurmont (AFP) July 19, 2000 -
The United States expressed skepticism Wednesday over North Korea's reported pledge to give up its missile program in exchange for access to space rocket technology.