Defense contractors with Phila. ties in $4B deal

Italian aerospace and defense company Finmeccanica will buy Parsippany, N.J.-based military contractor DRS Technologies Inc. for $4 billion, giving it a prominent position in the American defense market.

Both companies have operations in the Philadelphia region: Northeast Philadelphia-based Agusta Aerospace is part of a joint venture involving Finmeccanica. DRS, a supplier of computers and other equipment for U.S. military and intelligence operations, has operations in Wyndmoor, Montgomery County.

Rome-based Finmeccanica said it will pay $81 per share in cash, representing a 32 percent premium over DRS's 30-day average stock price. Finmeccanica will also cover $1.2 billion in net debt.

To satisfy U.S. regulations for foreign-owned defense companies, DRS, which will retain its name, will keep its own board of directors comprised mostly of American citizens holding high security clearance and a special oversight board. It will maintain its current management and headquarters in Parsippany.

Finmeccanica, which is 34 percent owned by the Italian government, has 60,000 employees worldwide, 2,100 of those in North America. DRS employs 10,000.

DRS shares were trading at $77.11 this afternoon on the Nasdaq market, down $.08 from yesterday's close.