Lockheed Martin, French to bid together for S. Korean company

First joint venture aims at Asian aerospace firm

Aerospace industry

June 17, 1999|By BLOOMBERG NEWS

PARIS -- Lockheed Martin Corp. and Aerospatiale Matra SA said yesterday that they will bid jointly for part of a South Korean aerospace company in what would be the first venture between the No. 1 U.S. defense contractor and France's biggest aerospace company.

The two will bid on Korea Aerospace Industry Ltd., a new venture linking Samsung Aerospace Industries Co., Hyundai Space & Aircraft Co. and Daewoo Heavy Industries Co. Korea Aerospace has asked Western aerospace companies to bid for a stake of between 33 percent and 49 percent. It had earlier valued a 50 percent stake at $165 million.

An investment would help Lockheed Martin sell its F-16 fighter jets in South Korea and give Aerospatiale the access to sell its Eurocopter helicopters and Airbus jets.

The relationship could also lay the groundwork for a series of other ventures between Lockheed Martin and Aerospatiale aimed at tapping markets for tankers and large cargo planes.

The plan is "brilliant," said Richard Aboulafia, director of aviation at the Teal Group in Fairfax, Va. "Lockheed Martin has an overwhelming interest in selling Korea fighter jets -- more F-16s, and in the long run, F-22s."

The partnership aligns Lockheed Martin with one of the main European rivals of the other big U.S. aerospace company, Boeing Co. Aerospatiale Matra is among the four partners in civil plane maker Airbus Industrie. The French company has been negotiating with Lockheed Martin for at least five years though this is the first time talks have produced an agreement.

"Aerospatiale Matra and Lockheed take this opportunity to confirm that they are also continuing their discussions for further partnerships on tanker transport and multi-mission large military aircraft programs," the companies said in a joint statement. "The decision taken today demonstrates the determination of the two companies to forge trans-Atlantic partnerships in aerospace."

Micky Blackwell, the president of Lockheed Martin's aeronautics division, has said the companies could form another venture within two years to develop a new aerial refueling tanker to replace Boeing's aging KC-135 planes. He said there could be a market for as many as 400 of the tankers.

The venture also helps position Lockheed Martin as seven European governments weigh whether to spend $25 billion to buy as many as 288 cargo planes to replace older craft. While Lockheed Martin wants to sell its own C-130, Airbus is also developing its own large aircraft.

Aerospatiale Matra and Lockheed had been among the nine companies named so far as bidders by Korean officials. British Aerospace Plc and Germany's DaimlerChrysler Aerospace AG are also bidding. The new Korean company has said companies have until early July to submit their proposals, and a preferred bidder will be chosen by the end of that month.

Pub Date: 6/17/99

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.