Australia Prepares to Pick New Munitions Supplier

Major American ordnance manufacturers Alliant Techsystems (UNKNOWN: ATK.DL  ) , General Dynamics (NYSE: GD  ) , and Olin Corp (NYSE: OLN  ) are all in the running to win a contract to produce "munitions, propellant and high explosives" for the Australian military, according to an announcement from that nation's Defence Materiel Organization this week.

On Monday, Minister for Defence Materiel Dr Mike Kelly  announced that three consortia of companies have progressed to the second stage of a tender Australia is holding to choose its munitions manufacturers after June 2015, when its current Strategic Agreement for Munitions Supply expires. Comprising these consortia are:

  • Alliant, in combination with NOIA Nominees Pty Limited, American Ordnance LLC, and Day & Zimmerman Inc
  • General Dynamics, teamed with Thales Australia Limited, NAMMO, and Winchester Australia (owned by Olin)
  • British arms merchant BAE Systems' (NASDAQOTH: BAESY  ) Australian division in combination with Expal Systems SA, BAE UK, and BAE USA.

Kelly did not say how much the supply agreement might be worth to the winners, but further details may be released when Australia announces its winner -- sometime in Q3 2014.


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