Pre-merger spinoffs; V-22 COD flies; Gremlins drone crashes, and more...

Raytheon and United Technologies have agreed to sell two businesses to BAE Systems for $2.2 billion — if that deal helps them win U.S. government approval for their own merger. 

UTC is selling Collins Aerospace’s GPS business for $1.9 billion; Raytheon is its Airborne Tactical Radios business for $365 million. 

“The UTC-Raytheon divestitures and the L3 Harris divestiture of a night vision product line, which Elbit purchased are reminders that analysts & planners need to consider non-U.S. firms with U.S. operations as they assess the market landscape in the 2020s for defense,” Capital Alpha Partners’ Byron Callan wrote in a Jan. 20 note to investors.

If it goes through, the deal will be BAE Systems’ first major, strategic acquisition since acquiring Detica in 2008.

Buying Collins’ GPS business would make BAE Systems one of just three companies to build military-grade GPS equipment, Callan wrote. (The others are Raytheon and L3Harris Technologies.)

That’s not all that has to happen before the merger goes through. UTC is spinning off its Carrier and Otis businesses.

Meanwhile, Raytheon announced in October that it would consolidate its five businesses into two. Those are: 

  • Intelligence, Space and Airborne Systems, the combination of Raytheon’s Space and Airborne Systems; Intelligence, Information and Services; and Forcepoint cybersecurity business.
  • Integrated Defense and Missile Systems, the combination of Missile Systems and Integrated Defense Systems.

Roy Azevedo will be president of the Intelligence, Space and Airborne Systems and Wesley Kremer will be president of the Integrated Defense and Missile Systems.

Welcome

You’ve reached the Defense One Global Business Brief by Marcus Weisgerber. Send along your tips and feedback to mweisgerber@defenseone.com or @MarcusReports. Check out the Global Business Brief archive here, and tell your friends to subscribe!


From Defense One

Pentagon Wants to Build One Satellite Per Week  // Marcus Weisgerber

Over the next two years, the Space Development Agency is looking to put dozens of satellites into orbit.

US Army Cancels $45B Armored Vehicle Contest That Drew One Bid // Marcus Weisgerber

The service now plans to reboot its effort to replace the Bradley Fighting Vehicle, but with different bidding parameters.

Toward a War With Fewer Radio Calls // Patrick Tucker

A recent Air Force test that data-linked an F-35 and an F-22 promises to move and combine data automatically.


Air Force Quiet After Navy, Army Leaders Lobby for Cash

Last week, top leaders from the Navy and Army publicly argued that their service should get a larger percentage of the Pentagon budget. The Air Force, however, appeared to be standing pat. Now comes a report from the Center for Strategic and Budgetary Assessment that says the Air Force needs more (and newer) planes. (It did not, however, call for taking any money away from the Army or Navy). The report focuses primarily on the combat air forces — think fighters, bombers and drones. These “should be sized for great power conflict,” the report said. “Preparing to prevent China and Russia from succeeding in major acts of aggression should be a fundamental force design priority for the Air Force’s future [combat air forces].” Other recommendations: buy more stealthy planes, like the F-35 Joint Strike Fighter and B-21 Raider bomber.

How much money will the Air Force need to do this? The CSBA report doesn’t say, but the National Defense Strategy Commission recommended the defense budget grow three to five percent above the rate of inflation annually. Over 10 years, that would amount to about $8 billion more for the Air Force. “That much in acquisition would fund a lot of the capabilities we recommend,” Mark Gunzinger, one of the CSBA report’s authors said Wednesday.

One thing that’s missing in all the lobbying for new weapons: People. No one seems to be talking about the additional sailors needed to crew a 355-ship Navy or pilots to fly the planes in a larger Air Force.

Earnings on Tap

  • Tuesday, Jan. 28: Lockheed Martin
  • Wednesday, Jan. 29: General Dynamics, Boeing & Textron
  • Thursday, Jan. 30: Northrop Grumman & Raytheon
  • Tuesday, Feb. 4: L3Harris Technologies

The Latest 737 Max Fallout

A week ahead of those earnings, Boeing said it does not expect regulators to unground the 737 Max until mid-2020. The company is recommending pilots undergo simulator training, which will extend the time it takes to recertify crews.

Gremlins Drone Flies, Then Crashes

A 2015 idea to launch and recover drones from a C-130 took a step forward in November. A C-130 cargo plane released the X-61A Gremlins Air Vehicle from its wing over the Dugway Proving Ground in Utah. The drone then flew for an hour and 41 minutes, checking off a number of test objectives. Testers shut off the engine, then deployed a parachute that was supposed to gently lower the drone to the ground. But that parachute failed and the drone crashed, Air Force Magazine reports. The final version of the Gremlins is supposed to be recovered midair by a C-130.

CMV-22B Flies

It’s been nearly 31 years since the Bell-Boeing V-22 Osprey first flew. But this week, a new version — one that will replace the Navy C-2 Greyhound — took flight for the first time. Dubbed the CMV-22B, the new variant will carry sailors, supplies and even F-35 engines to carriers at sea. “Bell Boeing will deliver the first CMV-22B to Air Test and Evaluation Squadron (HX) 21 in early 2020 for developmental test,” the companies said in a joint statement. Here’s a picture.

Making Moves

The Stimson Center named Victoria Holt and Rachel Stohl as vice presidents and members of the president’s senior leadership team. Holt and Stohl were previously managing directors at the Washington-based think tank.

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.