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BAE Systems Completes Acquisition of Armor Holdings Inc.

WASHINGTON -- BAE Systems today completed its acquisition of Armor Holdings Inc. (Armor Holdings), after receiving all required shareholder and regulatory approvals. The company announced it had entered into a definitive merger agreement to acquire Armor Holdings on May 7, 2007 in a transaction valued at approximately U.S. $4.532 billion (PS2.275 billion). Under the terms of the merger agreement, Armor Holdings shareholders will receive $88.00 for each share of Armor Holdings common stock held at closing, without interest.

The acquisition of Armor Holdings strengthens BAE Systems' position as one of the world's leading land systems businesses. Armor Holdings had sales in 2006 of approximately U.S. $2.361 billion.

"Armor Holdings is a welcome addition to BAE Systems," said Mike Turner, BAE Systems Chief Executive Officer. "Armor Holdings is a strong business with an excellent track record and a heritage of innovation and technology. The integration with BAE Systems' existing land systems business will strengthen our ability to provide our military customers with innovative capabilities, products and services."

Armor Holdings will be integrated into BAE Systems Land and Armaments, headquartered in Arlington, Virginia. The combined business is well-positioned to serve significant new tactical vehicle requirements, such as the Family of Medium Tactical Vehicles, the Mine-Resistant Ambush Protected vehicles, and future prospects such as the Joint Light Tactical Vehicle.

"BAE Systems and Armor Holdings share a common commitment to the men and women of the armed forces," said Walt Havenstein, president and CEO of BAE Systems, Inc. "Armor Holdings' expertise in automotive design and lean, high-volume manufacturing technologies in combination with BAE Systems' expertise in combat vehicle design, rapid prototyping and survivability systems, will strengthen our ability to provide the armed forces with tactical wheeled vehicles with increased survivability."

Armor Holdings' customers will benefit from enhanced logistics and support through integration with BAE Systems' well established reset, upgrade and support capability. In addition, BAE Systems' global marketing presence will enhance Armor Holdings' ability to offer tactical wheeled vehicle replacement in overseas markets.

Additional Information

In connection with the completion of the acquisition, Armor Holdings announced that $150 million in aggregate principal amount, or 100%, of its outstanding 8.25% Senior Subordinated Notes due 2013 (the "8.25% Notes") were tendered pursuant to its previously announced cash tender offer and consent solicitation. Armor Holdings will promptly pay for all such 8.25% Notes.

The acquisition constitutes a "fundamental change" under the indenture pursuant to which Armor Holdings' 2.00% Senior Subordinated Convertible Notes due 2024 (the "Convertible Notes") were issued. As a result, holders who surrender their Convertible Notes for conversion after the closing date of the acquisition and on or prior to a date to be fixed by Armor Holdings, which will be not earlier than August 16, 2007, will receive the merger consideration on an as-converted basis plus additional consideration in accordance with the Convertible Notes indenture. The foregoing does not constitute a notice of fundamental change under the Convertible Notes indenture and is qualified in its entirety by reference to the Convertible Notes indenture. Armor Holdings will give the notice of fundamental change at the appropriate time pursuant to the Convertible Notes indenture. Holders of Convertible Notes should read the Convertible Notes indenture for additional information.

About BAE Systems

BAE Systems is a global defense and aerospace company, delivering a full range of products and services for air, land, and naval forces, as well as advanced electronics, information technology solutions, and customer support services. With 88,000 employees worldwide, BAE Systems' sales exceeded PS13.7 billion (US$ $25.4 billion) in 2006.
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Publication:Business Wire
Date:Jul 31, 2007
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