Acquisition

BAE SYSTEMS PLC
30 June 2004

30 June 2004

BAE SYSTEMS TO PURCHASE BOEING COMMERCIAL ELECTRONICS

BAE Systems North America today announced it has reached a definitive agreement
to acquire Boeing's Commercial Electronics unit, a developer and producer of
avionics products and systems for commercial aircraft.

The acquisition of the Commercial Electronics unit, which employs about 800
people at facilities in Irving, Texas, and Everett, Wash., will increase BAE
Systems' already significant presence in commercial aircraft subsystems.

Conclusion of the transaction is expected during the third quarter, pending
regulatory reviews.

The Commercial Electronics business, which had 2003 sales of about $170 million
and net assets of about $15 million, will become part of BAE Systems' Platform
Solutions Sector, which provides a broad range of capabilities and products for
commercial and military aircraft.

'Boeing Commercial Electronics is a widely respected and highly capable
organisation, and we are delighted that it will become part of BAE Systems,'
said James Scanlon, Platform Solutions Sector president. 'Commercial
Electronics' strengths are highly complementary with our existing commercial
business, and this acquisition will greatly enhance our partnership with Boeing
Commercial Airplanes.'

The acquisition is consistent with BAE Systems' strategy of acquiring
profitable, growing businesses with strong, differentiated technology that will
enable BAE Systems North America to bolster its capabilities and provide
integrated solutions for major customers.

The Boeing unit will build on BAE Systems' leadership in aircraft flight and
engine control systems, adding capabilities in flight-deck systems, aircraft
systems control and monitoring, and data and electrical distribution.

In addition to the Irving and Everett operations, the Commercial Electronics
business also operates equipment service centers in London and Singapore.

Further, BAE Systems sees significant opportunity to expand the business base of
the commercial unit -- historically an internal supplier to Boeing -- by
offering its capabilities to other customers.

'This acquisition is strategically an excellent fit,' Scanlon said. 'We have a
long history of subsystems integration expertise in commercial flight and engine
control systems, and this transaction expands our portfolio to include systems
that span a broader set of capabilities on more Boeing aircraft. It's a natural
progression.'

Platform Solutions supplies electronic engine controls for all GE and CFM
International commercial jet engines and provides a variety of other commercial
aircraft subsystems, including the Boeing 777 fly-by-wire primary flight control
system, thrust management systems for Boeing 757 and 767 models, and flight
control computers for Airbus aircraft.

It also directly serves some 280 airline customers around the world.

Issued by

BAE SYSTEMS

London


                      This information is provided by RNS
            The company news service from the London Stock Exchange