BAE Systems and EADS have a long history of collaboration, and are currently partners in a number of important projects, including the Eurofighter and MBDA joint ventures. The two companies confirm that they are now in discussions about a possible combination of the businesses. The potential combination would create a world leading international aerospace, defence and security group with substantial centres of manufacturing and technology excellence in the UK, USA, France, Germany and Spain as well as in Australia, India and Saudi Arabia.

BAE Systems and EADS believe that the potential combination of the two businesses offers significant benefits for all stakeholders, over and above their individual business strategies, which both businesses continue to execute strongly. In particular, they believe that the combination of the two complementary businesses offers the opportunity of greater innovation, long term financial stability, and an extended market presence, which will enable them to compete even more effectively on the world stage.

Any agreement on the terms of a potential combination will require approval by the Boards of both BAE Systems and EADS, and would be subject to, amongst other things, a number of governmental, regulatory and shareholder approvals. There is no certainty at this stage that the discussions will ultimately lead to a transaction.

BAE Systems is a strong, well-run company, successfully implementing our strategy. During the process of the discussions with EADS, BAE Systems will continue to focus in meeting all of their current commitments.