Companies

L&T, EADS form venture for defence electronics equipment

Mumbai | Updated on February 11, 2011

Defence ties: Mr M.V. Kotwal, President, Heavy Engineering, L&T, and Mr Bernd Wenzler, CEO, Cassidian Electronics, at a press conference in Bangalore on Thursday. — Photo: G.R.N. Somashekar   -  Business Line

Larsen & Toubro and EADS — Europe's top aerospace and defence group — will set up a $20-million joint venture company to make and market radars, avionics, mobile systems (bridges) and electronic warfare equipment for military applications for the domestic and international markets.

L&T will hold 74 per cent and Cassidian 26 per cent in the tie-up, which will work out of Talegoan, near Pune, and Bengaluru.

Cassidian, the newly renamed defence and security division of EADS, is the joint venture partner of L&T.

An earlier proposed tie-up between the two did not receive the Government's nod, as EADS was to hold 49 per cent which exceeded the 26 per cent cap on foreign direct investment in the defence sector. The current deal has been structured to ensure that it addressed the Government's concern, especially when it came to the defence sector.

Engineering centre

Since 2006, Cassidian has been working in partnership with the Defence Avionics Research Establishment, a DRDO (Defence Research & Development Organisation) laboratory in Bengaluru, and cooperates with the Centre for AirBorne Systems.

Early this week, Cassidian set up an engineering centre in Bengaluru which the company said will employ over 100 Indian engineers.

The L&T-EADS joint venture will work closely with the new engineering centre, where systems design and engineering activities are to done.

Mr M.V. Kotwal, President, Heavy Engineering, L&T, said, “The coming together of L&T with Cassidian is a major milestone in the area of defence electronics. It will not only serve the Indian Armed Forces with the state-of-the art technology, but also provide a platform for making significant contributions to the global market in high-technology defence equipment.”

Mr Bernd Wenzler, CEO, Cassidian Electronics, said, “Cassidian is a high-tech company supporting global security by the development of hi-tech product and system solutions for armed forces and civil security worldwide. Our joint venture is proof of our commitment to India.

“Cassidian would like to establish an Indian industrial base for our European technologies with the development of a long-term partnership. We are prepared to bring additional capabilities into the JV company after the Indian law allow an increase of shares up to 49 per cent.”

Indigenous solutions

The new joint venture will deliver indigenous solutions to Indian customers, as well as the world market. The company will provide the armed forces with locally produced equipment and assured life-time support.

This January, L&T said it has signed a contract which will enable the Indian major to be part of the European company's strategic programme.

EADS is a global leader in aerospace, defence and related services. In 2009, the Group divisions comprising the Airbus, Astrium, Cassidian and Eurocopter generated revenues of €42.8 billion.

Published on February 10, 2011

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