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Tuesday, July 1, 2014

Nexter, KMW start talks on possible defence tie-up - source, (NYSE: GD)

French arms maker Nexter and Germany's Krauss-Maffei Wegmann (KMW) have entered into exclusive talks to create a tie-up that would rank as Europe's largest maker of ground armaments such as tanks, a source in France's defence ministry said. Potential post-merger European sales could amount to between 1.8 billion euros ($2.5 billion) and 2.0 billion annually, the source said, putting it ahead of BAE Systems, currently Europe's biggest defence contractor, and U.S.-based General Dynamics, in terms of European sales of ground armaments.Both defence firms were due to sign an agreement on Tuesday specifying the broad outlines of such a joint venture, due not before 2015, the source told Reuters.Nexter, maker of the VBCI armoured fighting vehicle and the Leclerc tank, is owned by the French state, while KMW, known for its Leopard tank, is family-owned.The new structure, to be dubbed "Kant", would be 50 percent held by the French state and 50 percent by the Bode-Wegmann family, with a Franco-German co-presidency for its board, the source said.

General Dynamics Corporation is an aerospace and defense company that offers a portfolio of products and services in business aviation; combat vehicles, weapons systems and munitions; military and commercial shipbuilding, and communications and information technology. Shares of GD traded higher by 0.81% or $0.94/share to $116.87. In the past year, the shares have traded as low as $77.40 and as high as $121.68. On average, 1754060 shares of GD exchange hands on a given day and today's volume is recorded at 1050470.