23 Mar 2006
BAE Systems plc has noted the recent rise in the share price of Babcock International Group PLC. BAE Systems plc and other major naval contractors have recognised for some time that a restructuring of the UK naval surface ship and submarine sectors would be to the benefit of both the Ministry of Defence and industry. A number of exploratory discussions have therefore taken place between industry participants about potential business combinations. Furthermore, the Defence Industrial Strategy, set out in the Defence White Paper published in December 2005, clearly stated HMGs view that there is need for consolidation of the UKs Maritime Industrial Base.
Against this background, BAE Systems plc confirms that it is considering various options in relation to the restructuring of the maritime sector. It is engaged in exploratory discussions with VT Group plc with respect to a potential joint acquisition of Babcock International Group PLC. No approach has yet been made to the Board of Babcock International Group PLC and there is no certainty that any offer will be made. A further announcement will be made if appropriate.
About BAE SYSTEMS
BAE Systems is the premier transatlantic defence and aerospace company delivering a full range of products and services for air, land and naval forces, as well as advanced electronics, information technology solutions and customer support services. With more than 100,000 employees worldwide, BAE Systems sales exceeded GB 15.4 billion (US$28 billion) in 2005.
For further information, please contact:
Charlotte Lambkin, BAE Systems
Tel: + 44 (0)1252 383836
Mobile: + 44 (0)7770 381311
Email: charlotte.lambkin@baesystems.com
John Neilson, BAE Systems
Tel: + 44 (0)1252 384795
Mobile: + 44 (0)7802 337 704
Email: john.neilson@baesystems.com
