BAE set for $4.5bn US takeover

Defence giant BAE Systems has agreed to buy US-based Armor Holdings in a deal worth in the region of $4.5bn (£2.27bn). BAE said it would pay $88 a share for Armor Holdings, which makes military vehicles and bullet-proof vests.

Europe’s biggest defence firm has been looking to expand in the key US market, where the firm has several lucrative contracts with the US government.

BAE recently declared a jump in pre-tax profits to £859m in 2006, from £557m the previous year.

The company bought US firm United Defense Industries two years ago for £2.1bn.

BAE said that it hoped to complete the takeover of Armor Holdings later this year, subject to shareholder approval and competition approval.

Shares in Armor Holdings gained on news of the offer, rising by 5.74% to $82.15 in early trade on the New York Stock Exchange.