{"id":15208,"date":"2017-07-24T04:13:25","date_gmt":"2017-07-24T04:13:25","guid":{"rendered":"https:\/\/one.sightlinemg.com\/defensenews\/uncategorized\/2017\/07\/24\/nordic-defense-sector-thrives-on-powerful-partnerships\/"},"modified":"2026-08-07T21:29:54","modified_gmt":"2026-08-07T21:29:54","slug":"nordic-defense-sector-thrives-on-powerful-partnerships","status":"publish","type":"post","link":"https:\/\/one.sightlinemg.com\/defensenews\/top-100\/2017\/07\/24\/nordic-defense-sector-thrives-on-powerful-partnerships\/","title":{"rendered":"Nordic defense sector thrives on powerful partnerships"},"content":{"rendered":"\n

The Nordic defense sector has seen a significant level of consolidation since the 1980s. Strategic bolt-on takeovers, including a series of high profile cross-border acquisitions in the 1990s, has produced a handful of internationally competitive Nordic defense groups whose general focus and range of ambition has shifted from European to world markets.<\/p>\n\n\n\n

The core business operations and structures of the region\u2019s leading players, including Saab, Patria, Kongsberg, Nammo and Terma, have all been shaped by the ebb and flow of both domestic and cross-border mergers and acquisitions.<\/p>\n\n\n\n

Although acquisitions that add value to production and market penetration retain interest, most leading Nordic defense companies now view equity and non-equity linked strategic partnerships as the most cost-effective ways of growing sales and expanding their market presence globally.<\/p>\n\n\n\n

The elevated attractiveness for Nordic defense groups to grow regional sales through international business partnerships was visible when Saab, in January 2017, increased its shareholding in Brazil\u2019s Akaer from 15 percent to 25 percent.  <\/p>\n\n\n\n

The transaction was linked to the expansion of the Saab-Akaer partnership and the Brazilian company\u2019s role in supplying parts to Saab\u2019s Gripen-NG fighter.<\/p>\n\n\n\n

The relationship with Akaer was expanded in 2015 after Saab secured a US$4.68 million contract to deliver 36 Gripen-NG aircraft to the Brazilian Airforce.<\/p>\n\n\n\n

Saab\u2019s strengthened equity-based investment proved the driving force in Akaer\u2019s decision to acquire all shares in the Brazilian optronic company Opto Eletr\u00f4nica\u2019s Space and Defense Division (E&D) in the first quarter of 2017.<\/p>\n\n\n\n

A fundamental component of Saab\u2019s global partnership strategy is to cement alliances using the Triple Helix Model to create collaborative value. The THM normally includes varying degrees of investment support and technology transfers in collaboration with industry, academia and state partners.<\/p>\n\n\n\n

\u201cOur partnership with Akaer is long-term. By exchanging knowledge, we want to expand our co-operation,\u201d said Ulf Nilsson, the head of Saab\u2019s Aeronautics business area.<\/p>\n\n\n\n

In a similar action to reinforce its market presence in the United States<\/st1:country-region>, Saab has scaled-up its capital investment program in Saab Defense and Security USA, its East Syracuse-based subsidiary in New York<\/st1:placename> State<\/st1:placetype><\/st1:place>. <\/p>\n\n\n\n

\u201cThe investment will lead to an influx of technology and job growth. Saab will continue to develop our capabilities and expand our U.S.<\/st1:place><\/st1:country-region> footprint,\u201d said Michael Andersson, Saab\u2019s head of Market Area North America. <\/p>\n\n\n\n

Saab\u2019s goal is to scale-up its global presence from its corporate and production base in Sweden<\/st1:place><\/st1:country-region>, said Group CEO H\u00e5kan Buskhe. Forming business partnerships will remain an important tool in developing markets and sales for Saab\u2019s Land, Sea and Air defense systems, he added.<\/p>\n\n\n\n

\u201cBuilding long-term industrial partnerships better enables us to develop technologies and finished products. Relationships and partnerships also give Saab new knowledge and experience that are invaluable to future business,\u201d Buskhe said.<\/p>\n\n\n\n

Saab\u2019s Nordic-focused growth strategy has traditionally been directed at raising market share. This strategy was backed by an acquisition policy that favored the takeover of advanced technology defense and security targets that added value to Saab\u2019s supplier capacities.<\/p>\n\n\n\n

The takeover of Nordic Defense Industries (NDI), in October 2016, consolidated Saab\u2019s industry position as the leading Scandinavian force in the design and manufacture of naval mine counter measures and charge systems.<\/p>\n\n\n\n

The commercial basis for the NDI acquisition was to develop Saab\u2019s market leadership in the unmanned underwater and mine warfare domain.<\/p>\n\n\n\n

Saab\u2019s purchase of ThyssenKrupp Marine Systems AB (formerly Kockums) from ThyssenKrupp Industrial Solutions AG in 2014 reinforced the Saab\u2019s long-term plan to develop a globally competitive underwater warfare business area.<\/p>\n\n\n\n

Like Saab, the Finnish state controlled Patria Corporation is also deploying a global partnerships and acquisitions\u2019 fusion strategy to grow sales and its international presence.<\/p>\n\n\n\n

Under the new strategy, Patria is pursuing growth by directing its investments focus on international lifecycle support services for military aircraft, including helicopters.<\/p>\n\n\n\n

\u201cWith this development we will further strengthen the focus of Patria\u2019s management on the implementation of our strategy, both internationally in new service partnerships and domestically with respect to aviation,\u201d said Olli Isotalo, Patria\u2019s CEO.<\/p>\n\n\n\n

The Nordic dimension of Patria\u2019s ownership structure entered a new phase in 2016 when Norway-based Kongsberg Defense & Aerospace (KDA) acquired a 49.9 percent shareholding in the company. In a deal negotiated with the Finnish state, KDA paid US$328 million for the 49.9 percent stake.<\/p>\n\n\n\n

KDA\u2019s buy-in at Patria creates a Nordic defense industry collaboration that contains a broad array of advanced weapons systems, including air-defense, armored fighting vehicles, military aircraft assembly, turreted mortar systems, surveillance and homeland security equipment, as well as anti-ship and land and sea targets missile systems.<\/p>\n\n\n\n

The scope for Patria-KDA\u2019s international expansion is further improved through Patria\u2019s 50 percent ownership position in Nammo. The Norway-headquartered Nammo produces munitions and rocket motor systems.<\/p>\n\n\n\n

\u201cThe ownership structure in Nammo, Patria and Kongsberg is very revealing. Essentially, it is a private-state partnership that protects the national defense interests of Norway<\/st1:country-region> and Finland<\/st1:place><\/st1:country-region>. But it\u2019s more than that, the three companies in this equity-linked industrial collaboration are very competitive international players in their own right. Together, they present as a more formidable international force,\u201d said Wim Kessler, an industry analyst based in The Hague<\/st1:city><\/st1:place>. <\/p>\n\n\n\n

The Norwegian state owns 50 percent shares in both Kongsberg and Nammo, while the Finnish state holds 50.1 percent of the shares in Patria.<\/p>\n\n\n\n

Nammo was established as a Swedish-Finnish-Norwegian defense company in 1998. The company\u2019s founding owners included Patria, Raufoss ASA (Norway<\/st1:country-region>) and Celcius Ab (Sweden<\/st1:place><\/st1:country-region>). Celcius\u2019s business was acquired by Saab in 1999. <\/p>\n\n\n\n

Recent acquisitive activity has resulted in Nammo acquiring Moog Inc\u2019s In-Space Propulsion business units in Ireland and Britain. The deal strengthens Nammo\u2019s position as a leading global supplier of compact thrusters and rocket engines, mainly for space launchers and satellites.<\/p>\n\n\n\t