Disposal

BAE SYSTEMS PLC
25 February 2005


NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION INTO OR IN THE UNITED STATES,
CANADA, AUSTRALIA OR JAPAN

BAE SYSTEMS plc COMPLETES PLACEMENT OF 13.2 MILLION SHARES IN SAAB AB

London, 25 February 2005

Further to its earlier announcement on 22 February 2005, BAE SYSTEMS plc ('BAE
Systems') announces the sale of 13.2 million series B shares ('Shares') in the
capital of Saab AB ('Saab'). The Shares have been placed at a price of SEK 113
per Share (the 'Placing') resulting in gross proceeds of SEK 1,491.6 million
(£113.6 million). The Shares represent approximately 12% of the issued share
capital by economic ownership of Saab.

ABN AMRO Rothschild was the sole bookrunner and global co-ordinator for the
Placing. Hoare Govett Limited is a corporate broker to BAE Systems.

Settlement of the Placing will take place on 2 March 2005 (ie a T+3 basis).

BAE Systems has granted ABN AMRO Bank N.V. (London branch) (on behalf of ABN
AMRO Rothschild) an option (the 'over-allotment option') over 1.975 million
Shares, which is exercisable during the period from the date the Placing price
is announced and ending 30 days after such announcement. Pursuant to the
over-allotment option, ABN AMRO Bank N.V. (London branch) (on behalf of ABN AMRO
Rothschild) may require BAE Systems to sell up to 1.975 million additional
Shares at the Placing price.

With the sale of 13.2 million Shares (exclusive of the over-allotment option)
BAE Systems' economic ownership in Saab after completion of the Placing will
fall to 22.1%. Simultaneously with the Placing, BAE Systems has initiated
conversion of 1.2 million of its series A Saab shares into 1.2 million series B
Saab shares in order to bring its voting rights and economic ownership in line,
given that each series A Saab share has ten votes whilst each series B Saab
share has one vote. Immediately following the Placing and the conversion, but
prior to any exercise of the over-allotment option, BAE Systems' share of the
voting rights in Saab will be 21.5%, with economic ownership being 22.1%. In the
event of full exercise of the over-allotment option, and following both the
Placing and the conversion, BAE Systems' economic ownership and voting rights in
Saab will be 20.3% and 20.2% respectively.

BAE Systems currently intends to retain its holding in Saab, following
completion of the Placing and any sale of shares pursuant to the over-allotment
option, as a long-term investment. In addition BAE Systems has agreed to a
lock-up period of 365 days after pricing of the Placing, subject to various
exceptions, including the consent of ABN AMRO Rothschild (not to be unreasonably
withheld).

Should you have any questions with respect to the Placing, please contact Andy
Wrathall at BAE Systems (tel: [phone]) or Richard Heald / Pim van der
Velden at ABN AMRO Rothschild (tel: [phone]).

MEMBERS OF THE GENERAL PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS
ANNOUNCEMENT IS DIRECTED ONLY AT PERSONS WHO HAVE PROFESSIONAL EXPERIENCE IN
MATTERS RELATING TO INVESTMENTS WHO FALL WITHIN ARTICLE 19(5) OF THE FINANCIAL
SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2001 (AS AMENDED) (THE
'ORDER') OR ARE PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) ('HIGH NET WORTH
COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC') OF THE ORDER (ALL SUCH PERSONS
TOGETHER BEING REFERRED TO AS 'RELEVANT PERSONS'). THE INFORMATION REGARDING THE
PLACING SET OUT IN THIS ANNOUNCEMENT MUST NOT BE ACTED ON OR RELIED ON BY
PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT ACTIVITY TO WHICH THIS
ANNOUNCEMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED
IN ONLY WITH RELEVANT PERSONS.

ABN AMRO Rothschild (an unincorporated equity capital markets joint venture
between ABN AMRO Bank N.V. and N M Rothschild & Sons Limited) and Hoare Govett
Limited are acting for BAE Systems and no one else in connection with the
Placing and will not be responsible to any person other than BAE Systems for
providing the protections afforded to clients of ABN AMRO Rothschild and / or
Hoare Govett Limited nor for providing advice in relation to the Placing.

This announcement has been issued by BAE Systems and is the sole responsibility
of BAE Systems. This announcement is for information purposes only and does not
constitute investment advice or an offer or invitation to acquire or dispose of
any Shares of Saab in Sweden, the United Kingdom, the United States or any other
jurisdiction. This announcement does not constitute an offer of securities for
sale, exchange or transfer, and is not soliciting an offer to purchase, exchange
or transfer any securities, in the United States or in any jurisdiction where
the offer, sale, exchange or transfer is not permitted or to any person or
entity to whom it is unlawful to make that offer, sale, exchange or transfer.
The Shares have not been and will not be registered under the US Securities Act
of 1933, as amended (the 'Securities Act'), and accordingly, may not be offered
or sold in the United States absent registration or except pursuant to an
exemption from, or in a transaction not subject to, registration under the
Securities Act. No public offering of the Shares will be made in the United
States or elsewhere.

Neither this announcement nor any copy of it may be taken, transmitted or
distributed, directly or indirectly, in or into the United States, Canada,
Australia or Japan. Any failure to comply with this restriction may constitute a
violation of United States, Canadian, Australian or Japanese securities laws.

The distribution of this announcement and the offering or sale of the Shares in
certain jurisdictions may be restricted by law. No action has been taken by BAE
Systems or ABN AMRO Rothschild or Hoare Govett Limited, or any of their
respective affiliates, that would permit an offer of the Shares or possession or
distribution of this announcement or any other offering or publicity material
relating to such Shares in any jurisdiction where action for that purpose is
required. Persons into whose possession this announcement comes are required by
BAE Systems, ABN AMRO Rothschild and Hoare Govett Limited to inform themselves
about and to observe any such restrictions.

In accordance with an available exemption from the Swedish prospectus regime,
the Placing has been made without a prospectus given that the minimum
allocation, if any, to a Swedish investor has been at least SEK 300,000.

In connection with the Placing, ABN AMRO Bank N.V. (London branch) will act as
stabilising manager and, as such, ABN AMRO Bank N.V. (London branch) or any
person acting for ABN AMRO Bank N.V. (London branch) may, in connection with the
Placing, over-allot or effect transactions with a view to supporting the market
price of the Shares at a higher level than that which might otherwise prevail
for a limited period after the Placing. However, there is no assurance that ABN
AMRO Bank N.V. (London branch) will undertake stabilisation action. Any
stabilisation action may begin at the time of adequate public disclosure of the
Placing price and, if commenced, may be discontinued at any time and must be
brought to an end no later than 30 days after the date of such adequate public
disclosure. The stabilisation transactions, if any, will be executed on the
Stockholm Stock Exchange through Alfred Berg Fondkommission AB, a wholly owned
subsidiary of ABN AMRO Bank N.V..

Stabilisation / FSA.


                      This information is provided by RNS
            The company news service from the London Stock Exchange