Disposal

BAE SYSTEMS PLC
25 July 2002

Thursday 25 July 2002



BAE SYSTEMS and EADS Form Paradigm Joint Venture and Realign Space Interests


  • Paradigm Secure Communications Ltd. established to manage Skynet 5

  • EADS acquire BAE SYSTEMS' 25 percent share in Astrium

  • Integration of EADS' launcher activities made possible



London / Amsterdam, 25 July 2002 - BAE SYSTEMS and EADS are teaming to address
military telecommunication satellite services. As a first important step, the
partners will form a new joint venture company, Paradigm Secure Communications
Limited, to address service provision requirements of the UK Ministry of
Defence's Skynet 5 programme. BAE SYSTEMS will have control of the UK operations
of this joint venture. Paradigm Secure Communications will contract with Astrium
for the manufacture and provision of satellites and ground systems. Skynet 5 is
the future military communications satellite system for the UK Ministry of
Defence. Paradigm has been designated as the preferred bidder for this service
provision.

In parallel, BAE SYSTEMS has today agreed to sell to EADS its 25 percent voting
interest/27.5 percent economic interest in the Astrium space joint venture for
€165 million. EADS currently holds a 75 percent voting interest/72.5 percent
economic interest in Astrium. Completion of the sale is conditional upon
obtaining all necessary regulatory clearances and upon finalisation of the UK
MoD contract for Skynet 5 with Paradigm Secure Communications Limited.
Completion is expected to take place before the end of the year.

Astrium employs 8,400 persons, over 2,200 of whom are employed in the UK, and in
the year 2001 had sales of €1.9 billion.

For EADS, the acquisition will allow the integration into a single company of
all its space interests in the UK, France, Germany and Spain, and will increase
the overall industrial and financial efficiency of the group's space business.
This single company will have two main industrial subsidiaries, dedicated
respectively to satellites and to launcher and orbital infrastructure.

The sale is in line with BAE SYSTEMS' strategy to focus on developing and
delivering advanced systems and services in the defence and aerospace sectors.



Issued by BAE SYSTEMS, London




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