Jay Johnson: Consolidation Possible For Small, Medium Defense Firms

Jay Johnson

In the wake of reports of a potential BAE SystemsEADS merger, the CEO of General Dynamics said Thursday he does not see a trend of mega-deals between defense contractors, Reuters reports.

According to Andrea Shalal-Esa’s story, Jay Johnson told a Morgan Stanley investor conference that once the U.S. defense budget situation becomes more clear, opportunities for acquisitions would focus primarily on small- to medium-sized companies.

He also declined comment on what a possible BAE-EADS combination would mean for the U.S. defense market, saying he needed to study the issue.

Before reports on that potential deal surfaced, BAE’s U.S. CEO Linda Hudson also addressed the uncertainty of sequestration’s effects on the defense industry and said small and medium-sized businesses could consolidate.

She also said commercial aviation presents an opportunity for many large contractors.

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