Acquisition

Babcock International Group PLC
09 May 2006



                                                                      9 May 2006


BABCOCK INTERNATIONAL GROUP PLC ACQUIRES NUCLEAR AND AIRPORTS SERVICES OPERATOR
                              ALSTEC GROUP LIMITED


Continuing its successful strategy of acquiring and developing technically
sophisticated businesses in growing infrastructure and asset management markets,
Babcock International Group PLC ('Babcock') today announces the acquisition on a
debt free basis of Alstec Group Limited ('Alstec') for a net cash consideration
of £44.9 million, funded from existing banking facilities.


Alstec reported turnover of £82.6 million in the year ended 31 March 2006 and
profit before interest and tax was £3.7 million after charging £1 million in
respect of legacy claims not transferring to Babcock.  The business has a total
order book of in excess of £67 million and gross assets of £21.5 million.  The
recent award of additional contracts in nuclear and an extension of operations
in the airports business together with a reduced level of ongoing costs offer
excellent prospects for growth in Alstec's profits in the current year.


Alstec operates in three distinct support services markets that are very
familiar to Babcock; nuclear, airports and defence systems.  Within each of
these markets Alstec provides a range of services and engineered solutions for
its customers' operationally complex and critical activities.  Babcock provides
high value, technically based services to large public sector and blue chip
customers operating in complex environments.  Alstec's operations are entirely
consistent with this model.


In nuclear, with turnover of £40 million in the year to 31 March 2006, Alstec
provides technical expertise associated with the reactor island at many UK
nuclear power stations including nuclear fuel handling equipment, remote
inspection, instrumentation and safety systems.  Alstec provides decommissioning
and waste management services at the Atomic Weapons Establishment, Aldermaston
and for the UKAEA and reactor outage support for British Energy with which
Alstec holds 'critical supplier' status.  Alstec supplies design, installation
and commissioning services for reactor protection systems to British Energy and
British Nuclear Group and is also involved in a number of long-term alliance
contracts with other key suppliers to the nuclear industry.  This business will
provide a natural extension to Babcock's existing nuclear clean up and
facilities management contracts at Rosyth and HM Naval Base, Clyde.


Alstec's airports services business, with turnover of £34 million in the year to
31 March 2006, provides operations and maintenance services for BAA PLC's
automated baggage sortation system at Heathrow airport.  The business also
operates and maintains the inter-terminal transfer facilities between all
terminals.  Opportunities to expand the provision of these services at Heathrow
into the proposed central terminal area redevelopment and the new T5 facilities
together with the possibility of similar service provision at other airports
offer excellent growth prospects.


Alstec also operates a small defence business (turnover in the year to 31 March
2006 of £9 million) for the design, supply, maintenance and upgrade of equipment
for the Ministry of Defence and its equipment suppliers for submarines, surface
ships and aircraft.  In particular it designs, supplies and maintains key
reactor components for the Vanguard and Astute class submarines and is the
design authority for the hydroplane and rudder actuators for Astute. Alstec's
defence business has also been selected as supplier and systems integrator for
the award winning weapons handling system for the future aircraft carriers and
has been working in partnership with Babcock at Rosyth on a number of other
aircraft carrier opportunities over the past twelve months.


The combination of Alstec's skills and track record with those of Babcock
creates exciting new opportunities in two major growth markets: nuclear
decommissioning and airport management as well as augmenting Babcock's existing
strong position in the maintenance of submarines, surface ships and on the new
carrier programme.


Peter Rogers, Chief Executive of Babcock, commented:

'Alstec is an excellent strategic fit with Babcock's existing support services
activities and brings to us an important set of new customers.  We are now well
placed to bid for a range of opportunities in the expanding market for nuclear
utility support services and decommissioning.  Alstec's position in the airport
services market is well established, and provides Babcock with a number of
additional opportunities in a growing market.


'Having recently secured some significant new contracts, Alstec offers excellent
growth prospects and we expect the acquisition of the business to be earnings
enhancing for Babcock in its first year of ownership.'*



Martin Melling, Alstec's Chairman and Chief Executive, commented:

'We are delighted to be joining Babcock.  Alstec has an exceptional pedigree
dating back to its GEC heritage, and there are significant opportunities to grow
in each of our core markets.  We believe that, with Babcock's resources,
relationships and complementary skills, we are exceptionally well-placed to grow
our business, which will provide increasing opportunities for the Alstec
workforce.'


Enquiries:


Babcock Group                                          Tel:   [phone]

Peter Rogers (Chief Executive)

Bill Tame (Finance Director)



Financial Dynamics                                     Tel:  [phone]

Andrew Lorenz / Susanne Walker


Notes to editors:

About Babcock International Group PLC


Babcock International Group PLC is an asset management business.  We manage
fixed infrastructure and mobile assets for a range of blue chip customers.
Babcock integrates labour, technical capabilities, systems and supply chain
partners to meet the outsourcing needs of customers for 'mission-critical'
capabilities.


In the year to 31 March 2006 sales from continuing business were £837 million.


The Group operates across five core business segments:


Defence Services, supplying facilities management, equipment support and
training services to the armed forces.


Technical Services, providing engineering and logistical support to both the
defence and civil sectors in the UK.


Engineering and Plant Services, supplying design, installation and maintenance
support to the energy sector in Africa and the US.  It also holds the Volvo
franchise for construction equipment in Southern Africa.


Rail, providing design, renewal and installation services for the UK rail
infrastructure.



Networks, supporting the design, maintenance and renewal of power transmission
and cellular telecommunications networks in the UK.



Babcock's head office is in London and the Company's shares are quoted on the
London Stock Exchange in the support services sector (EPIC:BAB).  For further
information, please visit Babcock's website at www.Babcock.co.uk.



About Alstec

Alstec Group is a support services business operating in three markets -
nuclear, defence and airport services employing some 1200 direct UK staff.
Alstec operates in demanding, complex environments: providing both equipment /
systems design and support services through its three market orientated business
units The nuclear business, headquartered at Whetstone, has staff located at
many civil nuclear facilities in the UK and at AWE Aldermaston.  The defence
business is niche and principally involved in specialist naval activities.  The
airport services business is centred on Heathrow and provides comprehensive
operations and maintenance support for the baggage systems in the central
terminal area, much of which it has designed, supplied and installed in its role
as a systems integrator.  For further information, please visit Alstec's website
at www.alstec.com.



* The statement that the acquisition will be earnings enhancing in its first
year of ownership when compared to the earnings per share that Babcock would
have achieved without the acquisition, does not constitute a profit forecast and
should not be interpreted to mean that the earnings per share in the year to 31
March 2007, or in any subsequent period, would necessarily match or be greater
than those for the relevant preceding financial period.



Dealing Disclosure Requirements


Under the provisions of Rule 8.3 of the City Code on Takeovers and Mergers (the
'Code'), if any person is, or becomes, 'interested' (directly or indirectly) in
1% or more of any class of 'relevant securities' of VT Group plc or of BAE
Systems plc or of Babcock International Group PLC, all 'dealings' in any
'relevant securities' of that company (including by means of an option in
respect of, or a derivative referenced to, any such 'relevant securities') must
be publicly disclosed by no later than 3.30 pm (London time) on the London
business day following the date of the relevant transaction.  This requirement
will continue until the date on which the offer becomes, or is declared,
unconditional as to acceptances, lapses or is otherwise withdrawn or on which
the 'offer period' otherwise ends.


If two or more persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire an 'interest' in 'relevant securities' of
VT Group plc or of BAE Systems plc or of Babcock International Group PLC, they
will be deemed to be a single person for the purpose of Rule 8.3.



Under the provisions of Rule 8.1 of the Code, all 'dealings' in 'relevant
securities' of VT Group plc or of BAE Systems plc or of Babcock International
Group PLC by VT Group plc or BAE Systems plc or Babcock International Group PLC,
or by any of their respective 'associates', must be disclosed by no later than
12.00 noon (London time) on the London business day following the date of the
relevant transaction.


A disclosure table, giving details of the companies in whose 'relevant
securities' 'dealings' should be disclosed, and the number of such securities in
issue, can be found on the Takeover Panel's website at
www.thetakeoverpanel.org.uk.


'Interests in securities' arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in the price of
securities.  In particular, a person will be treated as having an 'interest' by
virtue of the ownership or control of securities, or by virtue of any option in
respect of, or derivative referenced to, securities.


Terms in quotation marks are defined in the Code, which can also be found on the
Panel's website.  If you are in any doubt as to whether or not you are required
to disclose a 'dealing' under Rule 8, you should consult the Panel.



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