Good morning,
It’s been a busy week for defense focused investment bankers. The once behemoth of a conglomerate General Electric broke up, spinning off its aerospace business as GE Aerospace. Defense Tech unicorn Shield AI has agreed to buy an Australian company, opening up its way for entry into the Pacific. PE firm Carlyle is looking to sell StandardAero for a price tag around $10Bn. Australian shipbuilder Austal has has rejected a takeover bid from South Koreas Hanwha, while leaving the door open for future reconsideration. Hensoldt has taken over the Germany defense electronics firm ESG. And an Australian firm is looking to buy Brazilian missile maker Avibras. Whew! And that’s not all!
America continues to slow-roll aid to Ukraine and is pushing back against NATO desires to take over the weapons shipping effort to Ukraine; it’s almost as if America wants Russia to win. Speaker of the House Mike Johnson considers using frozen Russian asset to help pay for aid for Ukraine and pledges that a $60Bn aid package will go to a vote in the House floor in April. The far right of his party is resisting his efforts, with some members calling for his ouster.
Taiwan was rocked by the largest earthquake to hit the island in more than 25 years.
Missiles, directed energy, and AI have dominated the defense tech space this week.
Let’s dive in to these and other issues surrounding aerospace and defense technology.
Weekly News Round Up
Military
U.S. Defense modernization and innovation
Pentagon establishes a cyber policy office (C4)
Army to convert Patriot, GMLRS contracts into multi-year deals (BD)
Army refreshes competition for short-range air defense laser (DN)
Defense Tech Opportunities
AFRL extends deadline for 2024 Commander’s Challenge focused on defeating high-altitude threats (DVIDS)
DARPA will host an industry day for its Hermes program, which aims to develop threat agnostic delivery vehicles capable of systemically delivering diverse therapeutic cargo types throughout the body (SAM)
The OUSD(R&E) is requesting information on parties interested in participating in Thunderstorm 24-3 focused on robotics and human-machine interfaces (SAM)
Europe, Russia, the Arctic, NATO, and the war in Ukraine
US House Speaker Johnson pushes forward on Ukraine aid plan (TH)
Deputy US Secretary of State: Russia forces nearly fully reconstituted (BI)
NATO marks 75th birthday as Russian war gnaws at unity (AP)
Finland signs 10-year Ukraine security deal (RT)
NATO, worried about a Trump presidency, seeks to move weapons delivery coordination under its authority; White House pushes back (TH)
US has ceded its leadership role as Europeans prepare to go-it alone in supporting Ukraine (BD)
Denmark sacks its Chief of Defense, in part over frigate failures (DN)
Ukraine is increasing its deep strikes into Russia (BBC)
Russia-exit related losses topped $107B (RT)
China, Korea, and Asia
Taiwan hit by strongest earthquake since 1999 (FT)
There’s little consensus on the cost of deterring China (DN)
US Congress requests Pentagon brief on Chinese biotech firms (DN)
China’s advancing efforts to influence the US election raise alarms (NYT)
Japan stands up amphibious rapid deployment brigade, electronic warfare unit for defense of southwest islands (USNI)
Middle East and Africa
Yemeni Houthis may be running low on weapons as attacks slow (AP)
Israeli air strike kills aid workers (NYT)
Israel creates new brigade focused on mountain warfare in north of country (BD)
Sensor, weapons hiccups plagued Danish frigate in Red Sea (DN)
US could revoke Houthi terrorist designation if group stops Red Sea attacks (S&S)
U.S. Defense Industry News
Anduril to supply Army with software for Robotic Combat Vehicle (DN)
F-15EX advanced electronic warfare suite from BAE completes operational testing (C4)
Epirus directed energy to face off against vessels in US Navy testing (C4)
General Dynamics wins $922M contract for CENTCOM IT modernization (BD)
L3Harris eyes maritime version of Vampire counter-drone system (DN)
Navy test fires 4x $3.24M long-range anti-ship missiles, as Air Force seeks $1.7Bn for multi-year buy of 529 of the Lockheed-made weapons (ASF)
Greece to buy 35 Blackhawk helicopters from Lockheed Martin for $1.24Bn (RT)
Former RTX cyber and intel business sold for $1.3Bn begins operations as Nightwing (DN)
RTX’s SM-6 missile successfully intercepts medium range ballistic missile in test (DB)
Foreign Defense Industry News
In open letter, UK lawmakers, defense officials call for increased defense spending (DN)
As Denmark upgrades its jet fleet, it is selling surplus F-16s to Argentina (DN)
N. Macedonia to buy eight military transport helicopters from Leonardo (AW)
France’s Naval Group and Indonesian PT PAL create JV to build 2x Scorpene-class submarines for Indonesia (DN)
Italy’s Fincantieri inks $1.3B deal with Indonesia for two patrol ships (DN)
Space
Pentagon unveils its commercial space integration strategy (SN)
Budget constraints delay Space Force’s narrowband satellite efforts (C4)
Nuclear Power & Weapons
Nuclear fusion power plant plan reaches 'major milestone' (BBC)
Space experts foresee a need for nuclear power on the moon (AT)
AI, Robotics, & other Frontier Tech
Israel used ‘Lavendar’ AI system to identify 37,000 Hamas targets (TG)
The Air Force is retrofitting F-16s with autonomy kits (DN)
Defense official suffers Havana Syndrome during 2023 NATO summit in Lithuania (AP)
Intel reports $7Bn operating loss in its chips manufacturing business (CNBC)
OpenAI and Microsoft plan a $100B data-center project (TI)
A&D-Focused Finance
Shield AI agrees to buy Australian company Sentient Vision Systems, which will rebrand as Shield AI Australia (DN)
General Electric splits three-ways and spins off aerospace business as GE Aerospace, valued at over $100Bn (RT)
Hensoldt completes takeover of German defense electronics firm ESG in $726M deal, at a multiple of about 2x ESG’s annual revenues (DN)
Australian shipbuilder Austal rejects $662M takeover bid from S. Korea’s Hanwha—for now (BD)
PE firm Carlyle is weighing strategic options including a sale for StandardAero that could value the aircraft maintenance services provider at ~$10B, including debt (RT)
Australia’s DefendTex in talks to buy Brazil’s missile-maker Avibras for undisclosed amount (DN)
Y Combinator hosted its demo day this week for its Winter 2024 cohort. The cohort included 10 aerospace & defense companies, including our friends at Elodin (YC)
Steve Cohen, the founder of multi-sector (including Defense) investor Point72, says the firm can save $25M by adopting AI (CNBC)
Aerospace and defense parts manufacturer Loar filed for a US IPO (RT)
Satellite tech company AERKOMM will merge with IX Acquisition Corp. in a $235M deal (GNW)
Amphibious aircraft maker Icon Aircraft filed for Chapter 11 bankruptcy (BBG)
Important Reads
Mike Brown, Ellen Lord, and Bob Work identify six factors that will allow the DoD to accelerate its innovation, modernization, and adoption of technology.
Col. Maximillian Bremer and Kelly Greico argue that the Air Force should focus more effort on smaller drones.
Former Australian General Mick Ryan grades Russia’s Ukraine Campaign in 2024.
Lighter Side
Keep building!
Andrew