BAE Systems To Cancel Auction For Its Platform Solutions Unit – Reuters

BAE Systems Plc plans to cancel the proposed sale of its Platform Solutions unit, Reuters reported. A source close to the company told Reuters that BAE has decision to keep the division. People familiar with the matter earlier told Reuters that General Electric, Eaton Corp. and Warburg Pincus submitted final bids for the subsidiary of the U.K. defense contractor.

* BAE Systems to withdraw nearly $2 bln unit sale-source
* BAE decides unit earnings improving, sale unnecessary
* GE, Eaton, Warburg Pincus had bid for unit-sources

(Reuters) – BAE Systems Plc (BAES.L: Quote, Profile, Research, Stock Buzz) will cancel the planned sale of its Platform Solutions unit and keep the division in the company, a source close to the company told Reuters on Tuesday.

The British defense contractor, which hired JPMorgan Chase & Co (JPM.N: Quote, Profile, Research, Stock Buzz) and Wells Fargo (WFC.N: Quote, Profile, Research, Stock Buzz) to sell the business last year, is expected to announce the decision to withdraw the auction later on Tuesday, the source said.

Bankers and analysts said the unit, which makes aerospace parts including aircraft engine controls, could fetch $1.5 billion to $2 billion for BAE.

BAE Systems received three final bids, including one from General Electric Co (GE.N: Quote, Profile, Research, Stock Buzz), but determined that better earnings at the division makes a sale unnecessary, the source said.

The source was not authorized to speak with the media and declined to be named. Representatives for BAE Systems were not immediately available for a comment.

People familiar with the matter earlier told Reuters that GE, industrial company Eaton Corp (ETN.N: Quote, Profile, Research, Stock Buzz) and private equity firm Warburg Pincus [WP.UL] submitted final bids for the BAE unit.

Representatives for the bidders were not immediately available for a comment.

(Reporting by Soyoung Kim. Editing by Maureen Bavdek and Robert MacMillan)