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Carlyle buys defense firm
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August 26, 1997: 12:10 p.m. ET
Former defense chief Carlucci's firm buys United Defense for $850 million
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NEW YORK (CNNfn) - The Carlyle Group investment firm announced plans Tuesday to buy weapons maker United Defense L.P. for $850 million cash from FMC Corp. and Harsco Corp.
"United Defense is committed to continue to provide outstanding products and service to the Department of Defense, its allies and friends," Carlyle Managing Director William Conway Jr. said.
United produces ground combat and naval weapons systems worldwide. The company had 1996 sales of $1 billion.
Among its many defense projects, United currently serves as the main contractor for Crusader, the U.S. Army's $20 billion artillery system.
FMC controls 60 percent of United, while Harsco owns the remaining 40 percent.
The two companies created United in 1994 by combining FMC's Defense System Group and Harsco's BMY Combat Systems Division.
But as defense spending continues to dwindle in the post-Cold War era, FMC and Harsco (HSC) have decided to exit the sector.
"It's clear that in today's environment of fewer defense dollars and continuing consolidations within the industry, (our) interests are best served by the sale of our defense business," said Robert Burt, chief executive of Chicago-based FMC (FMC), which primarily produces chemicals and machinery.
Harsco chief Derek Hathaway said his company's long-term strategy has also involved getting out of the weapons business. Camp Hill, Penn.-based Harsco's principally provides metal reclamation and mill services.
By contrast, Washington-headquartered Carlyle Group focuses on defense and aerospace businesses. Headed by former U.S. Defense Secretary Frank Carlucci, the privately held company manages assets worth $1.8 billion.
Plans call for Tuesday's sale to close within three months.
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Harsco Corp.
FMC Corp.
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