BAE Systems to acquire Armor

Defense contractor BAE Systems Inc. said it would buy military armored vehicle maker Armor Holdings Inc. for $4.1 billion, part of BAE’s bid to tap into heavy demand from the U.S. military for vehicles in Iraq and other war zones.

BAE Systems Inc., a Rockville, Md.-based subsidiary of British defense conglomerate BAE Systems, will pay $88 a share for Armor Holdings, a 7% premium over the closing price of company shares Friday. Including $388 million in debt, the deal is worth $4.5 billion.

Shares of Jacksonville, Fla.-based Armor Holdings rose $4.45, more than 5%, to $86.60 in Monday trading after the takeover was announced.

The deal expands BAE’s presence in the market for armored Humvees, personnel carriers and other military equipment that can withstand roadside bombings and insurgent attacks in Iraq and Afghanistan.