Restructure Proposals

BAE Systems PLC
27 April 2001

                               RNS Announcement

27 April 2001

BAE SYSTEMS ANNOUNCES TWO NEW BUSINESS STRUCTURES IN ITS INTERNATIONAL
PARTNERSHIP DIVISION

  * NEW ALENIA MARCONI SYSTEMS:

BAE SYSTEMS and Finmeccanica have signed an agreement on the development of
their partnerships around Alenia Marconi Systems (AMS), including their
interests in the enlarged missiles company MBDA which will:

      + Contribute the AMS missiles activities to MBDA;
      + Strengthen AMS with the transfer of BAE SYSTEMS Combat and Radar
        Systems Ltd (CARS) to AMS, creating a Euro1.3 billion turnover
        business, with some 8,000 employees in the UK and Italy.

The CARS businesses include surface-based radar, such as the Sampson active
phased-array system, naval combat management systems, and land systems
applications.

AMS will continue to be a 50/50 joint venture between BAE SYSTEMS and
Finmeccanica, specialising in land-based and naval radar, command and control
systems, simulation and training and air traffic management. It will be led by
David Singleton as CEO

As BAE SYSTEMS is transferring CARS into AMS, Finmeccanica will invest a
similar amount to maintain its 50% shareholding.

The transaction remains subject to approval by regulatory authorities, which
is anticipated to be later this year.

  * CREATION of MBDA

BAE SYSTEMS, EADS and Finmeccanica have signed an agreement for the
incorporation of a single company that will re-group the missiles and missile
systems activities of their respective subsidiaries: Matra BAe Dynamics, EADS
Aerospatiale Matra Missiles and Alenia Marconi Systems.

The name of the new company will be MBDA. It has total sales of more than Euro
2 billion and an order book of around Euro13 billion, equal to more than six
years total sales. This strengthens MBDA's position as the Number Two
worldwide supplier of missiles.

The agreed structure means that the parties' shareholdings are held through
two intermediate holding companies, MBDAH SAS and AMS NV. The economic
interests of the partners in MBDA are as follows:

BAE SYSTEMS 37.5%, EADS 37.5% and FINMECCANICA 25%, with joint control rights

The new company employs approximately 10,000 people in France, the United
Kingdom and Italy, with Fabrice Bregier, currently CEO of Matra BAe Dynamics,
appointed as its CEO.

The transaction also remains subject to third party approvals, which are
anticipated to be received later this year.


                                        Ends