The Carlyle Group, a global private equity fund management firm, is stepping in as a facilitator for the overseas mergers and acquisitions (M&A) of domestically prominent defense companies with a stature that is growing worldwide.
According to industry and investment banking (IB) sources on March 24, Ian Fujiyama, a managing director and head of Global Aerospace and Government Services at The Carlyle Group, recently visited South Korea. He reportedly met with key officials from major domestic defense companies to discuss cooperation measures during the process of pursuing M&As with overseas defense company by domestic firms.
In this regard, Fujiyama reportedly stated at the meeting, “South Korean defense companies are achieving success in the global market because they are based on high technological capabilities and manufacturing capacity. They have sufficient production capabilities to meet the increasing demand across Europe, North America, and the Asia-Pacific region.”
Recently, major defense companies in South Korea have been actively seeking M&As and investments in defense-related companies in North America and Europe. Among them, LIG Nex1 is currently in the process of acquiring a 60 percent stake in Ghost Robotics, a U.S.-based quadrupedal walking robot development and manufacturing company, and is awaiting approval from U.S. authorities.
In the defense industry, numerous countries impose restrictions on foreign companies acquiring their domestic defense firms due to the sensitive nature of defense industries. Consequently, there is an expectation that The Carlyle Group, leveraging its extensive experience in the field, will provide support to domestic companies. The group can explore joint investment opportunities by forging strategic relationships with domestic firms that are expanding their influence in the global defense market. Additionally, analysis suggests that Carlyle could capitalize on synergies with its existing investment portfolio.
Over the past 34 years, The Carlyle Group has been recognized for its active investments in the aerospace, defense, and government services sectors, accumulating expertise and capabilities in these fields. It is reported that it has invested in about 40 companies with a total amount exceeding US$30 billion.
An official from the defense industry stated, “There are many challenges in obtaining approval from local governments and entering the boards of directors when acquiring defense-related companies in the United States or Europe. Given Carlyle’s extensive investment experience in the defense sector, it is expected that the group will provide significant assistance in resolving various issues for domestic companies pursuing overseas M&As.”
What sets Carlyle apart among global private equity firms in the defense investment sector is its robust network of political and government relationships. Unlike many global private equity firms headquartered in financial hubs like New York, Carlyle is based in Washington, D.C., a political center, fostering close ties with the U.S. government and politicians. Notably, former President George H. W. Bush and former British Prime Minister John Major have both worked for the company.
Thanks to this, Carlyle’s headquarters leasing team is known to have the industry’s top information capabilities and network. In particular, it has established business cooperation with major domestic companies that have made large-scale investments in the United States in recent years.