PARIS \u2014 Franco-German joint venture KNDS and Belgian CMI submitted competing bids for Renault Trucks Defense, meeting the deadline for best and final offers, defense specialists said Tuesday.<\/p>\n\n\n\n
The two companies have handed in their \u201cnon-binding best and final offers\u201d as the cutoff date was Monday by 12 p.m., a defense source told Defense News.<\/p>\n\n\n\n
Investment bank Rothschild acts as an adviser to Volvo, which is selling its group government sales unit, comprised of RTD, Acmat, Mack and Panhard.<\/p>\n\n\n\n
A preliminary offer, before the best and final, from KMW and Nexter Defense Systems, or KNDS, was \u201cvery bad,\u201d the second source said.<\/p>\n\n\n\n
\u201cThey have to improve their offer,\u201d a third defense executive said.<\/p>\n\n\n\n
Nexter, a state-owned company, was not inclined to pay high prices, while the company culture at KMW placed great value on technology. But the German firm did not see RTD as strong in technology, a fourth executive said.<\/p>\n\n\n\n
\u201cTechnology is the value added,\u201d the executive said.<\/p>\n\n\n\n
Nexter was not immediately available for comment, while KMW declined comment.<\/p>\n\n\n\n
There has been a shift at the procurement office, the Direction G\u00e9n\u00e9rale de l\u2019Armement, as it\u2019s now more open to bids from private equity firms, the second source said. The government could not impose a solution but could set conditions to the purchase.<\/p>\n\n\n\n
Advent, a global private equity firm, has shown close interest in bidding for RTD.<\/p>\n\n\n\n
Volvo will want to raise the offers, but the French arms industry appears likely to take a hit from the government\u2019s \u20ac850 million (U.S. $994 million) cut in 2017 defense spending.<\/p>\n\n\n\n
The French Army and industry have lobbied to speed up orders of the Griffon troop carrier and Jaguar combat vehicle in the Scorpion program, but with a budget cut, \u201cthey can forget a speed up in orders,\u201d the first source said.<\/p>\n\n\n\n
Nexter, RTD and Thales are industrial partners on the Scorpion vehicles.<\/p>\n\n\n\n
The tender also raises political questions.<\/p>\n\n\n\n
Volvo will naturally look for the highest bid for RTD, but the sale also offers a chance for consolidation in European land armaments, with the French government playing a key role in approving the pick of the buyer.<\/p>\n\n\n\n
\u201cIt is the shareholder who decides, but the government has the right to consider its strategic interest,\u201d the second source said.<\/p>\n\n\n\n
That could lead to France imposing conditions on the buyer, such as maintaining research and development, and keeping production in France, the source said.<\/p>\n\n\n\n
CMI, based just outside Liege, Belgium, is viewed by French observers as the outsider as Nexter is a French company and allied with German partner Krauss-Maffei Wegmann.<\/p>\n\n\n\n
\u201cIt is very sensitive,\u201d the second source said.<\/p>\n\n\n\n
French President Emmanuel Macron, a former Rothschild banker and economy minister, is keen to renew a Franco-German leadership of Europe, which includes a stronger defense base.<\/p>\n\n\n\n
\u201cWe know we are not among the favorites, but our offer makes sense to create a competitive group compared to Turkish and Israeli competitors,\u201d Jean-Luc Maurange, CMI executive president, said in financial daily Les Echos.<\/p>\n\n\n\n
\u201cOur wedding would lead to a consolidation of the European land defense sector, which is still too scattered,\u201d he said. \u201cFrance has a key role to play in this needed concentration of the defense industry, but not everything has to follow the Franco-German axis.\u201d<\/p>\n\n\n\n
The DGA previously rejected the prospect of acquisition by a private equity firm.<\/p>\n\n\n\n
\u201cA private equity company milks it for the cash and then sells it for capital gain. That does not interest us. We are on programs that run for 30 years,\u201d the former DGA head, Laurent Collet-Billon, told Defense News.<\/p>\n\n\n\n
KNDS previously confirmed its intention to make an offer.<\/p>\n\n\n\n
\u201cKNDS is an actor in the consolidation of European land defense,\u201d a Nexter spokesperson said in February. \u201cThe sale of RTD by Volvo is an opportunity.\u201d<\/p>\n\n\n\n
Sebastian Sprenger contributed to this story.<\/i><\/p>\n","protected":false},"excerpt":{"rendered":"
\u201cWe know we are not among the favorites, but our offer makes sense to create a competitive group compared to Turkish and Israeli competitors,\u201d CMI’s executive president said.<\/p>\n","protected":false},"author":7,"featured_media":66203,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_yoast_wpseo_meta-robots-noindex":"","_yoast_wpseo_meta-robots-nofollow":"","_yoast_wpseo_canonical":"","_acf":"","_yoast_wpseo_primary_category":14,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","_smg_distribution_targets":[]},"categories":[160,12,14,36],"tags":[],"coauthors":[464],"class_list":["post-33916","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-daily-news-roundup","category-industry","category-land","category-newsletters"],"acf":{"subheadline":"","legacy_arc_id":"AVVHPSOYBBEIHMQ2EDIGHJI3G4","arc_canonical_url":"\/2017\/07\/25\/cmi-knds-make-the-cut-with-final-bids-for-renault\/","remove_feature_photo":false,"is_sponsored":false,"subtype":"","redirect_url":"","disable_inline_ads":false,"native_logo_pretext":"Presented By:"},"yoast_head":"\n