Acquisition

BAE SYSTEMS PLC
27 September 2002

            BAE SYSTEMS and VT Group extend shareholding in Flagship

BAE SYSTEMS and VT Group have acquired Johnson Controls Limited's 26 per cent
share of Flagship Training Limited (Flagship).

Both companies had previously held a 37 per cent share in Flagship but this
agreement now provides for 50/50 joint ownership.

Flagship, which has its headquarters at HMS Collingwood near Portsmouth, entered
into a 15-year partnering arrangement with the Naval Recruiting and Training
Agency (NRTA) in 1996.

Through this ground breaking Public Private Partnership, Flagship markets Royal
Navy training around the world, provides facilities management and construction
services and invests through PFI in new training infrastructure.

Flagship has a turnover of c£70m per annum and employs 1200 staff both in the UK
and overseas.

The net assets of Flagship at March 2002 is £500,000

The BAE SYSTEMS shareholding in Flagship is through its Customer Solutions &
Support business.



Issued by:

BAE SYSTEMS plc

London


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