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From my understanding, defense is included under Industrials/Captial Goods groups.
Let me know if I'm wrong... I never heard of the BBs doing anything in defense other than advising companies on tapping the cap mtks for debt, equity or for other similar reasons.
Typically industrials groups do Aerospace and Defense. There are entire practices related to these companies who cover Boeing, Lockheed, KBR, Fluor, GenDyn, DynCorp, etc....
Ditto ExGS. And while massive mergers are closely scrutinized by the government (read: too much trouble), there is still plenty of M&A action to be had among smaller firms or non-US aerospace and defense firms.
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