Disposal

BAE SYSTEMS PLC
15 July 2002

                                 RNS Statement

                                                                  Monday 15 July

              BAE SYSTEMS Agrees sale of Chaff and Flares business

BAE SYSTEMS North America and Esterline Technologies today announced that they
have reached a definitive agreement under which Esterline Technologies will
acquire BAE SYSTEMS' Electronic Warfare Passive Expendables Division, consisting
of two business lines that produce expendable defensive countermeasures (chaff
and flares). The businesses are located at Lillington, North Carolina, and East
Camden, Arkansas.

At the Lillington facility, approximately 65 employees produce radar
countermeasure chaff used by aircraft to help protect against radar-guided
missiles.  At East Camden, about 235 employees produce a variety of
aircraft-dispensable flares designed to protect against infrared-guided
missiles.

Closing of the sales agreement, negotiated at $67.5 million in cash, is expected
to occur within 60 days.



Issued by:

BAE SYSTEMS

London



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