Two Global Companies Vie for Stake in Korean Aerospace

Asian Aerospace 2000 -- Two global aerospace groups are competing to acquire a third of Korea Aerospace Industries, the company that was formed last year by the merger of the Hyundai, Samsung and Daewoo aerospace businesses. By March, either a Boeing/BAE Systems group or a Lockheed Martin/Aerospatiale/Dassault team is expected to pay some $180 million for a 30% stake in Korean Aerospace.

The deal would provide Korean Aerospace with cash to develop new facilities and technology. In return, the winner would share in Korea's $3 billion market for aerospace and defense parts manufacturing, and would be in position to make a strong bid for Korean contracts, including a revived requirement for fighter aircraft. The F-X requirement calls for 60-plus twin-engined fighters, with deliveries starting in 2004-05.

Boeing and BAE Systems have confirmed their joint interest in a Korean Aerospace stake, the latest in a number of indications of closer links between the two companies. Last year, Boeing joined Matra BAE Dynamics in their bid to launch the Meteor air-to-air missile in the UK, and would attempt to sell Meteor to the US services-as a rival to Raytheon's AMRAAM-if the project goes ahead. Boeing and BAE Systems are also teamed on the UK Nimrod MR.4 project, and BAE Systems would support Boeing's C-17 if the Royal Air Force buys the aircraft.

Lockheed Martin has explored ties with Aerospatiale Matra since 1998. The companies have talked about jointly proposing an Airbus derivative as a replacement for USAF KC-135 tankers, and have discussed a turbofan-powered version of the A400M as a USAF airlifter. The US company is already teamed with Korean Aerospace on the KTX-2 supersonic trainer program.

By Bill Sweetman