BAE signs £2.6bn partnership agreement

BAE Systems and Italian defence firm Finmeccanica Spa have signed an agreement to bring together their European defence electronic systems activities in a deal worth £2.6 billion.

The new partnership – Eurosystems – establishes a Strategic Coordination Committee (SCC) and three majority controlled Joint Ventures, each with operational control of its business.

Richard Evans and Pierfrancesco Guarguaglini, the Chairmen of the respective parent companies, said in a joint statement today: "Our companies have shared objectives in a desire to improve their performance in the market, establish businesses that address the trend towards integrated systems and enhance their operational effectiveness.

"The [agreement] we have signed today provides the framework to achieve these objectives. Much detailed work remains to be done before the new companies are operational but we are confident that we will create companies that will meet our customers' requirements and provide opportunities for profitable growth."

BAE Systems is an international company engaged in the development, delivery and support of advanced defence and aerospace systems.

The company designs, manufactures and supports military aircraft, surface ships, submarines, radar, avionics, communications, electronics and guided weapon systems.

BAE System has major operations across five continents and customers in some 130 countries. The company employs more than 100,000 people and generates annual sales of approximately £12 billion through its wholly-owned and joint venture operations.

Finmeccanica is Italy's second-largest manufacturing company and its leading high-tech company.

The group operates primarily in the aerospace and defence sectors, but also has experience in sectors such as rail transport, energy and IT.

Finmeccanica's aerospace and defence activities account for around 70% of consolidated sales, and employ more than 32,000 staff. Finmeccanica also invests around 1 billion euro a year (or 13% of its value of production) in advanced technology, notably dual technologies.

(GMcG)