Heads of Agrmnts Signed with Finmeccanica and AMS

BRITISH AEROSPACE PLC
20 October 1999


BRITISH AEROSPACE AND FINMECCANICA SIGN
HEADS OF AGREEMENT ON ALENIA MARCONI SYSTEMS


British Aerospace  (BAe) and Finmeccanica today announced the signature of 
Heads of Agreements covering their agreement to develop their partnerships
around Alenia Marconi Systems (AMS), including their interest in Matra BAe
Dynamics (MBD).   

AMS is a 50/50 joint venture between Marconi Electronic Systems - which is in
the process of merging with BAe - and Alenia Difesa, a Finmeccanica company,
and currently specialises in land based and naval radar, command and control
systems, missiles, simulation and training and air traffic control. 

The agreement involves the contribution of BAes activities in the
surface-based radar, land and naval systems fields to the new AMS. AMS will
remain equally controlled by the two parties.  This will create a stronger
European defence systems company with sales of about 1 billion Euro and some
9,000 employees in the UK and Italy.

The parties intend to integrate the missile capability of AMS into MBD, the
50/50 joint venture between Aerospatiale Matra and BAe, with AMS becoming a
shareholder in the new enlarged entity.

Leadership of business areas has been assigned, taking into account the
specific capabilities and resources in each country. The recognised
leaderships are consistent with the current technological and manufacturing
competencies that the partners intend to develop and strengthen.


Note to Editors:  A further statement on MBD will be issued separately.


Issued by:                     

Corporate Communications
Simon Raynes                                   
British Aerospace                            
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