BAE SYSTEMS and Finmeccanica Move to Establish Major Partnership
04 Jul 2003
BAE Systems plc and Finmeccanica Spa have signed a Memorandum of Understanding to establish a partnership, Eurosystems, bringing together their European defence electronic systems activities. The partnership establishes a Strategic Coordination Committee (SCC) and three majority controlled Joint Ventures, each with clear operational control of its business.
The SCC, formed by senior managers of the shareholders, will facilitate the co-operation and interaction of the joint ventures. The SCC will also ensure that the JV strategies support the multi-domain nature of future defence requirements and respond to the demand for highly integrated systems.
The three JVs will operate in the following areas:
* A Systems Integration and C4ISR business, to be majority owned and managed by BAE Systems, with capabilities in C4ISR information systems and sub-systems, combat management systems, land & naval radars and air traffic control systems. The business will be formed from existing activities of AMS (a 50-50 JV of BAE Systems and Finmeccanica) and BAE Systems C4ISR (less communications).
* A Communications Systems business, to be majority owned and managed by Finmeccanica, with capabilities in strategic and tactical communication systems, networks and secure systems. The business will be formed from the existing activities of Marconi Selenia Communications and the communications activities of BAE Systems C4ISR.
* An Avionics business, to be majority owned and managed by Finmeccanica, with capabilities in sensor systems, airborne radars, mission systems, electro-optics and electronic warfare systems. The business will be formed from activities within BAE Systems Avionics and Finmeccanica's Galileo Avionica.
Having established the principle of a structure and management framework that delivers clear accountability and positions the businesses in line with the needs of the market, the two companies will move into a detailed process of valuation. The formation of the three joint ventures is subject to the parties executing definitive agreements and obtaining all necessary regulatory clearances. The arrangements announced today do not affect the interests of BAE Systems and Finmeccanica in MBDA.
Richard Evans and Pierfrancesco Guarguaglini, the Chairmen of the respective parent companies, said in a joint statement today, "Our companies have shared objectives in a desire to improve their performance in the market, establish businesses that address the trend towards integrated systems and enhance their operational effectiveness. The MOU we have signed today provides the framework to achieve these objectives. Much detailed work remains to be done before the new companies are operational but we are confident that we will create companies that will meet our customers' requirements and provide opportunities for profitable growth."
About BAE SYSTEMS:
BAE Systems is an international company engaged in the development, delivery and support of advanced defence and aerospace systems in the air, on land, at sea and in space. The company designs, manufactures and supports military aircraft, surface ships, submarines, radar, avionics, communications, electronics and guided weapon systems. It is a pioneer in technology with a heritage stretching back hundreds of years. It is at the forefront of innovation, working to develop the next generation of intelligent defence systems.
BAE Systems has major operations across five continents and customers in some 130 countries. The company has 100,000 people and generates annual sales of approximately 12 billion through its wholly-owned and joint venture operations. BAE Systems, innovating for a safer world.
About Finmeccanica SpA
Finmeccanica is Italy's second-largest manufacturing company and its leading high-tech company. The group operates primarily in the aerospace and defence sectors, but also has significant know-how and manufacturing assets in sectors such as rail transport, energy and IT. Finmeccanica's aerospace and defence activities account for around 70% of consolidated sales, and employ more than 32,000 staff. Finmeccanica also ranks as Italian number one in research and development: the group invests around EUR 1 billion a year (or 13% of its value of production) in advanced technology, notably dual technologies. Visit www.finmeccanica.it for additional information.
For further information contact:
Phil Soucy
BAE Systems Corporate Communications
Tel: +44 (0) 1252 384797
phil.soucy@baesystems.com
Patrizia Pasini,
Finmeccanica Corporate Communications
Tel: +39 06 32473497
patrizia.pasini@finmeccanica.it
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