BAe, AM & FNM Achieve a Major European Ambition

BRITISH AEROSPACE PLC
20 October 1999



AEROSPATIALE MATRA, BRITISH AEROSPACE AND FINMECCANICA ACHIEVE A MAJOR
EUROPEAN AMBITION


Aerospatiale Matra (AM), British Aerospace (BAe) and Finmeccanica (FNM) have
today signed a Heads of Agreement to establish a joint venture in missiles and
missile systems bringing together their current activities in this field.  

These are Matra BAe Dynamics (MBD), a 50/50 joint venture of BAe and AM; the
missiles systems divisions of AMS, a 50/50 joint venture of Finmeccanica and
Marconi Electronic Systems, which is now finalising its merger with BAe, and
the fully owned missile subsidiary of Aerospatiale Matra.

With a turnover of about Euro 2.5 billion (£1.5billion), the new European
missile group will employ over 10,000 people in Italy, the United Kingdom and
France and will also hold the 30 per cent shareholding in LFK, the main German
guided weapons business, currently owned by MBD.  

The Group will be owned 50% by AMS and 50% by a holding company owned by BAe,
as to 25%, and AM, as to 75%, giving effective parent company interests as
follows:  AM 37.5%, BAe 37.5% and FNM 25%.  

The Group, will have a complete range of land and sea based surface to air
systems as well as air launched and anti-ship weapons for worldwide customers
and will be the prime contractor or main partner in all European missile
programmes.  It has an order book totalling more than four years of predicted
future sales.

The Group will combine most of the key participants in the future European
Beyond Visual Range Anti-Aircraft missile (BVRAAM), currently under
competition by the British Ministry of Defence, and will bring to that
customer an efficient seamless organisation to manage this important
programme.

Fabrice Bregier, the current Chief Executive Officer of MBD, will head the 
Group.

John Weston, Alberto Lina and Philippe Camus, Chief Executives of the
respective parent groups said in a joint statement today:

This move is a natural development in the consolidation of the European
aerospace and defence industry.   It is in accordance with the wishes of the
European Governments with regard to industry consolidation and produces
synergies and brings further scale and enhanced technological capability
together with additional value for customers and shareholders.


Issued by:                     

Corporate Communications
Simon Raynes                                   
British Aerospace plc                          
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