US Control Systems Business Acquired

British Aerospace PLC
27 April 2000


BAE SYSTEMS ACQUIRES US CONTROL SYSTEMS BUSINESS

British Aerospace plc (BAE SYSTEMS) has agreed to acquire the Lockheed Martin
Control Systems business for $510m.

The acquisition, which will be funded from existing cash resources, will
complement BAE SYSTEMS' established electronic systems and flight controls
systems businesses.  Control Systems has particular strengths in
full-authority digital engine controls (FADEC) and digital fly-by-wire flight
controls with a broad range of programme applications.

The acquisition will enhance BAE SYSTEMS' existing capability in aircraft
flight controls and will deliver greater value to its customers.  The addition
of the Control Systems business will also broaden BAE SYSTEMS' backbone
controls technology into the commercial full-authority digital engine control
product arena and improve BAE SYSTEMS' engineering base, heightening its core
competencies in the design and production of leading-edge control systems.
The Control Systems business had net assets of $64m as at 31 December 1999.
In the year ended 31 December 1999 the business produced profit before
interest and tax of $42m on sales of $359m. The acquisition is expected to be
slightly earnings enhancing in the current year before amortisation of
goodwill.  Completion is conditional on receiving the necessary regulatory
clearances and is expected to take place in the next few months.
Control Systems designs, develops and produces full-authority digital engine
controls (FADEC) for aircraft gas turbine engines as well as digital
fly-by-wire flight control systems, vehicle management systems and other
related airborne electronic systems.  Major platforms served are the F-18,
C-17, V-22 and the A-10. It also designs and manufactures space launch vehicle
control systems and vehicle power drives.

Control Systems employs some 1,750 people in the USA at Johnson City, New York
and Fort Wayne, Indiana.

John Weston, Chief Executive of BAE SYSTEMS said: 'This acquisition further
strengthens our growing presence in North America. It complements well our
existing electronic control activities and extends the broad base of
programmes in which we are involved. This is consistent with our overall
strategic intent of being the benchmark global systems, defence and aerospace
company.'

BAE SYSTEMS has its head office at Farnborough in the UK.  The company has
significant operations in the United States and, with this acquisition, will
employ over 20,000 people in North America in the design, development and
manufacture of a wide range of aerospace products and intelligent electronic
systems for Government and commercial customers.

BAE SYSTEMS activities in North America include information systems such as
mission management and strategic planning systems; communications and data
links; combat systems; avionics and navigation systems for civil and military
use.

27 April 2000