BAe looks abroad following Marconi takeover approval

British Aerospace has raised the prospect of more international collaboration as it absorbed the Government’s decision to approve its takeover of Marconi Electronics Systems (MES) last week. BAe, which reported a 2.6% rise in interim profits to £358m, said it was still discussing possibilities with Finmeccanica, though nothing had yet been agreed. The talks centre […]

British Aerospace has raised the prospect of more international collaboration as it absorbed the Government’s decision to approve its takeover of Marconi Electronics Systems (MES) last week.

BAe, which reported a 2.6% rise in interim profits to £358m, said it was still discussing possibilities with Finmeccanica, though nothing had yet been agreed.

The talks centre on the future development of Alenia Marconi Systems, the electronics and missiles joint venture which Finmeccanica’s Alenia Difesa subsidiary formed with MES.

BAe chief executive John Weston said both were looking at areas of overlap, including missiles, military aircraft and aerostructures, to assess collaborative opportunities.

`Finmeccanica has made it clear that it is looking for solutions sector by sector and we’re happy to go along with that,’ Weston said.

He dismissed suggestions of an imminent agreement, describing reports of a 50:50 joint venture in the area of defence electronics and naval systems as premature.

It had been claimed that a joint venture to specialise in radar, air traffic controls systems and naval defence electronics would be set up by the two businesses.

BAe’s results, which contained few surprises, were well received in the City.

Concerns about cash flow from the lucrative Al Yamamah oil-for-arms deal in Saudi Arabia were more muted than a year ago, though some sector analysts claimed that interest in the short-term appeared to be lower than forecast.

One analyst with a large European bank said: `Although they seem to have received most of the money, it was still less than we had anticipated.’