Re Agreement

BAE SYSTEMS PLC
20 October 2004



20 October 2004

BAE Systems and Finmeccanica agree revised Eurosystems transaction



BAE Systems and Finmeccanica have agreed in principle a revised structure for
the Eurosystems transaction.

The revised structure will enable BAE Systems to bring together its systems
integration activities into a new wholly-owned business comprising the UK
operations of AMS, currently a 50/50 joint venture with Finmeccanica, and BAE
Systems' C4ISR Networked Systems & Solutions business.

In addition, BAE Systems and Finmeccanica will form a new Avionics business
comprising BAE Systems' UK avionics activities and Finmeccanica's Galileo
Avionica business. BAE Systems will hold a 25% interest in this new entity.

Finmeccanica will acquire the UK air traffic management businesses of AMS,
together with Gematronik GmbH and AMS (ASI) Inc, in addition to all of the
Italian operations of AMS and BAE Systems' Communications business - CDI.

This revised structure is consistent with BAE Systems' intent to enhance its
systems integration and network enabled capabilities (NEC) in the UK.

The transaction is subject to negotiation of definitive agreements and
applicable regulatory approvals being obtained.

A further announcement giving full details of the transaction will be made upon
exchange of definitive contracts.

Issued by:
BAE Systems plc
London







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