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 Tel: +44 (0) 1252 383069 Fax: +44 (0) 1252 383947

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