British Aerospace and France’s Dassault Aviation will form a joint venture to develop new technology for both Eurofighter and its Dassault rival, the Rafale.
The technology is intended to be used in the eventual successors to Eurofighter and Rafale, but could also be used in mid-life upgrades of these aircraft.
This week’s BAe-Dassault deal follows last week’s announcement by GKN that it could merge its Westland helicopter arm with Italy’s Agusta. Such a merger could produce a company with a £5bn order book.
In another restructuring move, defence secretary George Robertson and his French, German, Italian and Spanish counterparts this week agreed to help defence firms which are merging to meet the threat of tougher US competition.
The deal includes a guarantee that countries can depend on each other to supply any defence equipment they need if restructuring means production of a particular weapon is concentrated in another European country.