BAE SYSTEMS AND VT GROUP CREATE NAVAL JOINT VENTURE
11 Jun 2008 | Ref. 177/2008
BAE Systems and VT Group today signed the final legally binding agreement to form the Joint Venture (JV) company, BVT Surface Fleet (BVT). This will combine BAE Systems Surface Fleet Solutions, which includes surface warship building and surface warship through-life support, VT’s surface warship building and through-life support operations and each of BAE Systems’ and VT’s 50% shareholdings in their existing surface warship through-life support joint venture, Fleet Support Limited (FSL).
The terms of the agreement are largely unchanged from those set out in the announcements of the Framework agreement from BAE Systems and VT Group on 25 July 2007(see notes to editors).
The proposed transaction has been cleared by the relevant European Union and US regulatory bodies but remains subject to VT shareholder approval, expected at an Extraordinary General Meeting to be held on 30 June 2008. It is intended that the JV become operational on 1 July 2008, after VT shareholder approval has been received.
The JV will also sign a 15 year partnering arrangement with the MoD which supports the transformation of the naval sector and provides BVT with leadership of defined future programmes aligned with BVT's commitment to provide consistent delivery of the best equipment, services and support to the Royal Navy.
BAE Systems and VT have appointed Sir John Parker as the non-executive Chairman designate and Alan Johnston as Chief Executive designate of BVT. Sir John is also non-executive Chairman of National Grid plc and Mr Johnston was previously Managing Director at AgustaWestland. Both have a wealth of experience in the naval industry and are looking forward to creating a world-class business to work in partnership with the Royal Navy and other navies around the world.
BVT will operate facilities in Glasgow, Bristol (Filton) and Portsmouth.
Chief Executive Mike Turner comments: “The formation of BVT Surface Fleet creates a global leader in the provision of naval ships and through-life support giving armed forces world-wide significantly enhanced capability. The JV will help secure the long term sustainability of the UK naval sector and the thousands of jobs it supports.”
Notes to editors:
BAE Systems will own 55% and VT will own 45% of the issued share capital in BVT.
BVT will bring together BAE Systems Surface Fleet Solutions, which includes surface warship building and surface warship through-life support, VT’s surface warship building and through-life support operations and each of BAE Systems’ and VT’s 50% shareholdings in their existing surface warship through-life support joint venture, Fleet Support Limited (FSL).
VT will also acquire BAE Systems’ 50% holding in Flagship Training Limited (“Flagship”), a provider of training solutions and support services.
BAE Systems and VT Group will have equal board representation and voting rights.
BVT Surface Fleet will employ over 7,000 people and will have a turnover approaching £1bn.
BAE Systems will have the right to call VT’s shareholding in the JV after three years from completion (subject to certain conditions). VT will have the right to put its shareholding in the JV on BAE Systems, with effect from any time one year after completion (subject to certain conditions).
Further details as announced on 25 July 2007.
About BAE Systems:
BAE Systems is the premier global 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 97,500 employees worldwide, BAE Systems' sales exceeded £15.7 billion (US $31.4 billion) in 2007.
For further information contact:
John Neilson, BAE Systems
Tel: +44 (0)1252 384795 Mob: +44 (0)7802 337704
john.neilson@baesystems.com
Lindsay Walls, BAE Systems
Tel: + 44 (0) 1252 383074 Mob: 44 (0) 7793 427582
lindsay.walls@baesystems.com
Issued by:
BAE Systems, Farnborough, Hampshire GU14 6YU, UK
Tel: +44 (0) 1252 384719 Fax: +44 (0) 1252 383947
24hr media hotline: + 44 (0) 7801 717739
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