BAE Systems on lookout for U.S. buys

WASHINGTON (Reuters) - BAE Systems Plc BA.L is looking at more acquisitions in the United States as Europe's largest defense contractor aims for a greater slice of the world's biggest military market, the company's incoming U.S. chief said on Monday.

"We've never stopped thinking about acquiring here in the United States," said Walt Havenstein at the Reuters Aerospace and Defense Summit in Washington, D.C., a year after BAE spent $4 billion buying U.S. armored vehicle maker United Defense Industries.

"Conditions have to be right for acquisitions. Over the last couple of years the market place has been pretty hot," said Havenstein, who is set to take over as the head of BAE's U.S. operations on January 1. "So it's been difficult for us to make acquisitions that meet our financial thresholds. But we'll keep trying."

BAE Systems vaulted itself into the top ranks of Pentagon contractors last year with its United Defense acquisition. The UK-based company now ranks as the No. 7 defense contractor in the United States and gets about 40 percent of its sales in the that country.

The United Defense purchase triggered a brief flurry of medium-sized U.S. defense deals, with General Dynamics Corp. (GD.N: Quote, Profile, Research, Stock Buzz) buying intelligence systems company Anteon International Corp. for about $2 billion and L-3 Communications Holdings Inc. (LLL.N: Quote, Profile, Research, Stock Buzz) picking up rival training and intelligence company Titan Corp. for a similar sum.

After selling its 20 percent stake in European plane maker Airbus, which is majority owned by EADS, BAE has some money to spend on acquisitions, but Havenstein declined to name any targets.

"I think everybody thinks about L-3," he said, referring to the U.S. defense contractor whose founder, Frank Lanza, died earlier this year. "L-3 is just one of many companies that we keep considering," added Havenstein. "But I wouldn't point out L-3 more than anything else."

Havenstein said BAE would be "pragmatic" about acquisitions in the future, considering companies that offer "future organic growth opportunities."