Carlyle and BAE, the UK’s largest defence contractor, are preparing a bid for Davenport naval yard in Plymouth, where nuclear submarines are maintained and upgraded.
A spokeswoman for Carlyle confirmed the link-up, saying: “We are looking to team up with BAE regarding [Davenport].”
The yard is currently owned by a consortium of KBR, a recent spin-off from US defence firm Halliburton, building group Balfour Beatty, and engineering firm Weir Group, who have appointed UBS to manage the sale. It is expected to be valued at about £200 million (€305 million; $393 million).
A successful bid would leave BAE and Carlyle in pole position to benefit from the UK government’s proposed plan to spend £25 billion rebuilding its nuclear submarine fleet.
The government has already said it is looking to cut down on defence spending by using the same contractor to build and maintain its fleet. BAE, which recently won a £947 million contract to maintain the Tornado aircraft it supplies to the Ministry of Defence, already builds Vanguard submarines at Barrow-in-Furness.
It would not be the first time that Carlyle has made its presence felt in the UK defence sector. The buyout firm is well known to the government after taking a 31 percent stake in the part-privatisation of Qinetiq, a defence research firm, in 2003 for £42 million. It later made a substantial profit when Qinetiq completed a £1.3 billion float in February 2006, a move that caused controversy as most of the beneficiaries were based outside the UK.
Carlyle also owns a number of other assets in the aerospace and defence sectors.