Joint Venture Announcement

BAE SYSTEMS PLC
14 December 2006


          BAE Systems surface ship build and naval support discussions



                                                                14 December 2006



BAE Systems plc and VT Group plc announce that they are in early discussions
regarding the combination of their surface ship build and naval support
businesses into a joint venture.  BAE Systems' submarines business is not
included within the scope of these discussions.  This initiative is in line with
the Defence Industrial Strategy of the Ministry of Defence.



A further announcement will be made in due course.



Issued by:

BAE Systems plc

London




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