Creation of MBDA integration of Europe's missile industry. Another decisive step beyond

BAE SYSTEMS, EADS and Finmeccanica signed on April 26 the agreement for the incorporation of a single company that will re-group the missiles and missile systems activities of their respective subsidiaries, Matra BAe Dynamics, EADS Aerospatiale Matra Missiles and Alenia Marconi Systems. The name of the new company will be MBDA.

With a total sales figure of more than EUR 2 billion and an order book of around EUR 13 billion, equal to more than six years total sales, the new company is strengthened in its position as Number Two worldwide for missiles. The company employs approximately 10,000 people in 10 different regions in France, the United Kingdom and Italy.

Philippe Camus and Rainer Hertrich, CEOs of EADS, said: "The consolidation process of the European missile systems industry to ensure its durability against fierce competition from an already re-structured US industry, is now taking a new and decisive step forward. The new company will be supported by powerful and well-established shareholders in these sectors,".

Recent major successes such as the Scalp EG / Storm Shadow, PAAMS and Meteor demonstrate the importance of a co-operation among the European industries. The creation of Matra BAe Dynamics (1996) and Alenia Marconi Systems (1998) followed by the decision of BAE SYSTEMS and Finmeccanica to contribute AMS missile systems activity to MBDA, pave the way for stronger and more fruitful co-operation.

BAE SYSTEMS' CEO John Weston said: "The equal partnership between EADS and BAE SYSTEMS created a world-beating entity. I am delighted to extend this successful partnership by welcoming Finmeccanica as a new partner. The addition of the AMS and Aerospatiale Matra Missiles guided weapons businesses to the existing company makes it a truly world class player and represents a substantial value creation opportunity for our shareholders."

Alberto Lina, Chairman and CEO of Finmeccanica, said : "It is important to take this additional European step and to maintain the achievements of the existing companies, particularly the experience gained in terms of developing advanced products and acceptability by the customers. Finmeccanica is delighted to contribute its experience to a partnership of equals, together with EADS and BAE SYSTEMS"

The company is present in all market segments and offers more than 40 missiles and missile systems in production or in development.

The agreed structure means that the parties' shareholdings are held through two intermediate holding companies, MBDAH SAS and AMS NV. The economic interests of the partners in MBDA are as follows: BAE SYSTEMS 37.5%, EADS 37.5% and FNM 25%, with joint control rights.

The appointed CEO will be Fabrice Brégier, currently CEO of Matra BAe Dynamics. He will be assisted by two COOs, Alan Garwood and Mario Di Donato.

The transaction remains subject to third parties approvals, which are anticipated to be received later this year.

For further information please contact:

Roland Sanguinetti +33 (0)42 24 24 26

Charlie Miller +44 (0)12 52 38 47 97
BAE Systems

Cecilia Pippa +39 (0)6 324 73 395