UK - Saudi Arabia

BAE SYSTEMS PLC
18 August 2006




                    UK - SAUDI ARABIA DEFENCE MODERNISATION


                                                           18 August 2006

BAE Systems welcomes today's announcement that the Governments of the Kingdom of
Saudi Arabia and the United Kingdom of Great Britain and Northern Ireland have
agreed the required commercial principles which will effectively initiate the
purchase of Typhoon aircraft and the associated commitment to the industrial
plan to be launched.


In December 2005, the Governments of the Kingdom of Saudi Arabia and United
Kingdom of Great Britain and Northern Ireland signed an Understanding Document,
intended to establish a greater partnership in modernising the Saudi Arabian
Armed Forces.

                                 Ends


Issued by:

BAE Systems plc

London


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