Large cap European defense companies range up to market caps of $150 billion with Airbus, or at $75/60 billion with BAE Systems or Thales, with many companies valued in the $20/50 billion bracket, such as Leonardo or SAAB, which may reflect insufficient scope of the European defense segment
Except for the largest firms which access international markets, most firms rely on support of their national governments. Such national platforms sometimes become launching pads for international expansion, as in the case of Dassault Aviation
The limited scope of 'sovereign' markets usually drives necessary, and often uncomfortable, partnerships, source of dispute about manufacturing across European borders
Latest strains between Airbus and Dassault about the European Warplane Alliance, or the 7-year lag in advancing the Main Combat System (MGCS) between KNDS France, Thales, KNDS Deutschland and Rheinmetall, speak volumes
However, more critically, the constraints of small national military budgets limit the capacity of these firms to manufacture weapon systems in standardized volume, at speed and supported by strong R&D budgets
Cross-partnerships offer partial, and probably costly, solutions to industrial capacity and innovation, but they also make consolidation by mergers difficult and often unrealistic
Kongsberg Gruppen ASA
OTC-listed European Defense -Small Caps theme is the companion list of this selection, published for information purposes, although poor trading records may imply unreliable volatility and performance ratios of the dollar-noted shares
