Disposal

BAE SYSTEMS PLC
20 August 2007


        BAE Systems agrees to the sale of its Inertial Products business

                                 20 August 2007


Further to the announcement on 24 April 2007, BAE Systems today announces the
completion of the sale of its Inertial Products business to investment
affiliates of J .F. Lehman & Company, the US private equity firm, for a cash
consideration of $140m, subject to adjustment according to the level of working
capital and net debt or net cash in the business at closing.

The business is comprised of BAE Systems Inertial Products Inc., based in
Cheshire, Connecticut, Heath, Ohio, Wayne, New Jersey and BAE Systems Inertial
Products business in Plymouth, UK (including its 50% shareholding in Silicon
Sensing Systems Limited).

Inertial Products supplies military and commercial customers with inertial
sensors and measurement units for the control, navigation and guidance of air
and ground vehicles, precision weapons systems, missiles and aerial targets as
well as digital terrain systems for aircraft.
The business employs approximately 810 people.



Issued by
BAE Systems plc
London




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