PARIS – French-German joint venture KNDS, Belgian CMI and private equity firm Advent each filed offers to buy Renault Trucks Defense, two industry executives said Friday.

A sale of RTD is part of the disposal by Volvo of its group government sales unit, which includes Acmat, Mack and Panhard. Rothschild acts as adviser to the Swedish truck maker on the divestment.

Cinven had looked at making an offer and decided to pull out, an executive said. Perhaps the British venture capital firm had bid for another company, curbing its appetite for acquisitions for now.

Bids on the table were non-binding preliminary offers, with a shortlist to be drawn up in three weeks, afternoon daily Le Monde reported. Those shortlisted would have access to detailed data, allowing a best and final offer to be made by the end of July. The French government will keep a close eye on the selection.

Volvo and KMW Nexter Defense Systems, or KNDS, declined comment. KNDS has previously confirmed its intention to make an offer.

"KNDS is an actor in the consolidation of European land defense," a Nexter spokesperson told Defense News in February. "The sale of RTD by Volvo is an opportunity."

That approach is based on a "complementarity" as Nexter and RTD work as partners on the French Army’s Scorpion modernization program, the VBCI infantry fighting vehicle and Caesar cannon, a second executive said. RTD specializes in armored vehicles less than 14 tons, while Nexter supplies heavier platforms.

If KNDS were to win the tender, RTD would join as a third partner to the French-German joint venture rather than face a shut down.

"An acquisition would not lead to any closures," Nexter chairman Stephane Mayer told business daily Les Echos May 16.

RTD, which is cash rich, would need a new IT system, likely to cost €10 million to €15 million (US $11.3 million to $16.9 million) over five years and replace the present network which has servers in Sweden, the first executive said. The company makes double digit annual profit and has forecast 2017-18 sales of €700 million to €800 million (US $789 million to $902 million).

The Direction Générale de l’Armement procurement office is not involved in the present stage of the tender and would only intervene if there was a foreign buyer, a spokesman said.

"The DGA will seek assurance the key French requirements of our armed forces will be met over the long term, particularly in view of RTD’s role in the Scorpion program," he said.

The previous French defense minister, Jean-Yves Le Drian, encouraged Nexter to bid for RTD, but there is now a new government formed, which may spark uncertainty over political support, the second executive said.

General Dynamics is unlikely to be on the short list as it is "impossible" France would accept a bid by a U.S. company, the first executive said. He pointed to the lack of reciprocity due to the Buy America Act and the America First campaign as the reason.

Cinven had considered a bid and had worked on a business plan, including an expansion by acquisition. Iveco of Italy and French privately owned Soframe were seen as potential targets. American Motors had also looked at RTD, Defense News was told.

If CMI’s bid were accepted, that would add a new industrial actor to European industry, partnering a maker of guns and turrets with a vehicle builder. On brand names, Volvo uses the RTD and Mack company names by paying fees to Renault, the French car company which owns the names. Whichever bidder buys the Volvo unit will want to use the present brands, particularly Mack, a widely known American name. "It’s historic, it’s American," an executive said.

Nexter displayed at the IDEX trade show in Abu Dhabian updated version of its Leclerc heavy tank, equipped with a KMW remote controlled turret, indicating close ties between the French and German firms.

In the Scorpion program, Nexter, RTD and Thales are key partners on the Griffon multirole troop carrier and Jaguar combat vehicle.

Share:
More In Land