Acquisition

RNS Number : 7520O

BAE SYSTEMS PLC

12 March 2009

BAE SYSTEMS ANNOUNCES AGREEMENT TO

ACQUIRE ADVANCED CERAMICS RESEARCH, INC.

BAE Systems today announced it has entered into a definitive agreement with the founders of Advanced Ceramics Research, Inc. to purchase all of the shares of the Company for $14,700,000 in cash, which includes an element of deferred consideration.

Advanced Ceramics Research, Inc., a privately held company based in Tucson, Arizona, is a producer of small Unmanned Aircraft Systems (UAS) and advanced ceramic materials. The company employs 60 people.

The proposed acquisition will be completed following receipt of regulatory clearances.

The acquisition supports BAE Systems' UAS strategy. To underpin the delivery of this strategy, BAE Systems will bring together capability from across its home markets, while respecting relevant export control regulations and industrial policy issues. The acquisition will provide BAE Systems with mature, operational products within the small/mini and tactical UAS arena. The addition of these smaller UAS platforms will complement the larger UAS being developed by BAE Systems in the United Kingdom.