BAE to bid for DML

BAE has launched a takeover bid for Devonport Management Ltd (DML) in the UK-based Devonport dockyard where the Royal Navy?s nuclear-powered submarines are refitted in programmes worth hundreds of millions of pounds.

BAE had been expected to make a joint bid with US financial company Carlyle, which is now reported to be making its own separate bid. The moves are the latest twists in a behind-the-scenes strategy to create single structure companies to design, build and maintain subs and warships from cradle to grave. The policy was demanded by the government in its Defence Industrial Strategy laid down in 2005 in a bid to cut costs and create a sustainable skilled naval shipbuilding industry.

In another move, BAE and the Portsmouth-based shipbuilder VT Group are said to be close to agreeing a link-up for surface shipbuilding between Portsmouth and BAE?s Clyde yards, although apparently not including the Barrow shipyard where the nuclear powered submarines are built.

The price of DML is believed to be between £200m and £400m. Bids for it could also come from Babcock International, which runs Rosyth naval dockyard and the Faslane nuclear sub base, and part US-owned QinetiQ, which runs defence research sites and ranges including Eskmeals. US sub builder Electric Boat could also bid.