Re Joint Venture

BAE SYSTEMS PLC
07 December 2004



SAAB takes increased marketing responsibility for Gripen fighter aircraft and
BAE SYSTEMS intends to reduce its shareholding in SAAB

In 1995 SAAB and BAE Systems created a 50/50 Joint Venture to develop and
explore the Gripen Export business. In order to adapt to both external and
internal dynamics, this Joint Venture has evolved including the creation of
Gripen International as the export marketing organization for Gripen. SAAB and
BAE Systems have jointly decided to develop further the cooperation regarding
the Gripen export business.

SAAB will take the responsibility for Gripen International's efforts to win new
Gripen export business. As already envisaged in 1995, through the Joint Venture
with BAE Systems, SAAB's export marketing capabilities have increased and it is
now appropriate for SAAB to take the lead for these activities. The move also
opens possibilities to realize further synergies in the interface between Gripen
International and SAAB.

Gripen is now well established in the export market, with orders from South
Africa, Hungary and the Czech Republic, for a current total of 56 aircraft. The
joint investment, the Export Baseline Standard, is nearing completion, and the
first delivery is scheduled for May 1, 2005 to the Czech Republic. The
production lines for South Africa and Hungary are operational. SAAB and BAE
Systems will continue to have the joint responsibility for any Gripen activity
in these established export markets and will also be able to cooperate on future
Gripen exports on an optional basis.

The change will be implemented from 1st of January 2005.

In recognition of the changes to the Joint Venture Agreement BAE Systems will
reduce its shareholding in SAAB AB. BAE Systems will retain at least 20 percent
of votes and capital that will be considered as a long term investment.

Quote Ake Svensson, President and CEO, SAAB:

'The relationship with BAE Systems has now firmly established Gripen in the
export market and for SAAB this is a logical step forward. Under our leadership
we are confident that we will secure new orders from prospects already
identified and continue to develop the export opportunities over time.'

Quote Mike Turner, CEO, BAE Systems

'BAE Systems remains fully committed to all existing Gripen contracts and will,
on a case-by-case basis, also directly support new marketing efforts. Our
reduced ownership will also more appropriately reflect the new scope of
cooperation between us and is regarded as a long term investment'.

Issued by

BAE Systems plc

London

For further information contact Charlotte Lambkin at BAE Systems on 01252 383836




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