The planned restructuring of Britain's shipbuilding and maintenance industry moved a step forward yesterday with news that engineering services company Babcock is to pay £350m for the company that owns Devonport Dockyard, which refits and refuels the Royal Navy's submarine fleet.
Babcock is paying cash for Devenport Dockyard, which refits and refuels the Royal Navy's submarine fleet
Babcock, which raised £90m by a share placing to help fund the deal, is paying cash to Devonport's owners KBR, Balfour and Weir Group. US private equity firm Carlyle was the only other bidder after BAE Systems dropped out.
KBR, which held 51pc of Devonport, was pressed to sell after a dispute with the Ministry of Defence. It is thought that Lord Drayson, the defence procurement minister, was unhappy with plans by parent company Halliburton to float KBR.
Babcock, which owns the Faslane and Rosyth shipyards, was considered front-runner as the MoD is encouraging the industry to consolidate ahead of plans to award a £3.9bn contract for two new aircraft carriers and replace the Trident nuclear submarine fleet.
BAE and VT Group are about to put their shipbuilding interests into a joint venture. BAE would own 55pc and VT the rest. Once this is agreed, the MoD will announce details of the carrier contracts.
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However, Whitehall officials say the terms for the joint venture and the carriers have been agreed but the Treasury is stalling an announcement until Gordon Brown takes over, as expected, as Prime Minister in June. "I think industry is starting to get a touch frustrated that they cannot unveil this. Brown is teeing it up as a good-news announcement for the summer," said a source.
Babcock is paying cash for Devenport Dockyard, which refits and refuels the Royal Navy's submarine fleet
Babcock, which raised £90m by a share placing to help fund the deal, is paying cash to Devonport's owners KBR, Balfour and Weir Group. US private equity firm Carlyle was the only other bidder after BAE Systems dropped out.
KBR, which held 51pc of Devonport, was pressed to sell after a dispute with the Ministry of Defence. It is thought that Lord Drayson, the defence procurement minister, was unhappy with plans by parent company Halliburton to float KBR.
Babcock, which owns the Faslane and Rosyth shipyards, was considered front-runner as the MoD is encouraging the industry to consolidate ahead of plans to award a £3.9bn contract for two new aircraft carriers and replace the Trident nuclear submarine fleet.
BAE and VT Group are about to put their shipbuilding interests into a joint venture. BAE would own 55pc and VT the rest. Once this is agreed, the MoD will announce details of the carrier contracts.
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However, Whitehall officials say the terms for the joint venture and the carriers have been agreed but the Treasury is stalling an announcement until Gordon Brown takes over, as expected, as Prime Minister in June. "I think industry is starting to get a touch frustrated that they cannot unveil this. Brown is teeing it up as a good-news announcement for the summer," said a source.