United Defense L.P. and Bofors Weapon Systems Collaborate on Sale and Manufacture of Naval Gun Systems.

WASHINGTON--(BUSINESS WIRE)--March 31, 1998--United Defense L.P. and Bofors Weapon Systems have entered into a collaborative agreement that enables United Defense, Armament Systems Division, to market and manufacture Bofors' 40 mm and 57 mm naval guns.

The agreement facilitates the United Defense sale of the 40 mm Mk 3 and 57 mm Mk 3 Bofors guns for U.S., foreign military sales (FMS) and some direct international commercial sales applications.

The agreement, executed Feb. 3, provides improved opportunities for market penetration of the 40 mm and 57 mm Bofors guns, along with Bofors' 3P ammunition, into old as well as new sales areas. United Defense will assume the marketing lead for U.S. and FMS sales of Bofors' gun systems, as well as for direct sales in certain designated countries. Upon successful sale, United Defense will act as prime contractor, subcontracting the ordnance and elevating mass to Bofors. Additionally, Bofors will retain responsibility for the 3P family of ammunition.

United Defense is the manufacturer of the 127 mm (5-inch) 54- caliber Mk 45, currently being upgraded to 62-caliber/Mod 4 configuration for Naval Surface Fire Support applications. Also available from United Defense is the 25 mm Mk 96 Stabilized Gun Mount. The addition of the Bofors guns provides United Defense the capability to offer its customers a full spectrum of automated naval gun systems, with a wide range of options in cost, size, and mission application.

The 40 mm Mk 3 is a fully automated, non-deck-penetrating system providing self-defense capability against missiles, guided bombs, aircraft, and helicopters, while providing capability against maneuvering surface targets. It is capable of being mounted on ships of all sizes, as an air defense weapon on larger craft, and as a multi-purpose weapon on smaller vessels.

The 57 mm Mk 3 provides optimized firepower against a wide range of air, surface, and on-shore targets by providing automated ammunition selectability. The 57 mm Mk 3 also offers an extremely stealthy design providing exceptionally low radar cross section.

The Bofors guns provide high effect and low total ownership cost, and will initially be marketed for U.S. applications including patrol craft, amphibious ships, and surface combatants.

United Defense is the largest manufacturer of tracked, armored combat vehicles and medium-caliber naval guns in the United States, and is a major company in the international defense marketplace. Headquartered in Arlington, Va., United Defense employs more than 7,200 people with major development, manufacturing and service sites in Minneapolis; York, Pa.; San Jose and Santa Clara, Calif.; Anniston, Ala.; Aiken, S.C.; Louisville, Ky.; and Aberdeen, S.D.

Bofors Weapon Systems is a member of the Celsius Group. The Celsius Group is one of Sweden's leading advanced technology industrial concerns, focused on the defense industry and closely related fields of commercial technology. With the Nordic countries, the United States and Australia as its "domestic" markets, the Celsius Group is an international industrial concern.

CONTACT: United Defense, L.P.

Jeff VanKeuren, 612/572-7615

or

Bofors Weapon Systems

Kjell Gothe, 46-8-463-0019