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British Aerospace

From Academic Kids

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British Aerospace (BAe) was a UK aircraft manufacturer, now part of BAE Systems.

Contents

History

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BAe evolution since 1955 until 1999 merger to form BAE Systems

The company was formed as a statutory corporation on April 29, 1977 as a result the Aircraft and Shipbuilding Industries Act. This called for the nationalisation and merger of; the British Aircraft Corporation, Hawker Siddeley Aviation, Hawker Siddeley Dynamics and Scottish Aviation.

In accordance with the provisions of the British Aerospace Act 1980 the statutory corporation was changed to a plc, British Aerospace Public Limited Company, on January 1 1981. On February 4 1981 the government sold 51.57% of its shares. The British government sold its remaining shares in 1985, maintaining a £1 golden share which allows it veto foreign control of the board or company.

BAe was the UK's largest exporter, a Competition Commission report (http://www.competition-commission.org.uk/rep_pub/reports/1995/fulltext/364c3.pdf) gives a ten-year aggregate figure of £45 billion, with defence sales accounting for approximately 80%.

On September 26 1985, the UK and Saudi Arabian governments signed the Al Yamamah contract, with BAe as prime contractor. The contracts, extended in the 1990s and never fully detailed, involved the supply of Tornado strike and air defence aircraft, Hawk trainer jets, Rapier missile systems, infrastructure works and naval vessels. The Al Yamamah deals are valued at anything up to £20Bn and still continue to provide a large percentage of BAE Systems' profits.

In 1991, following large expenditure and a recession, BAe saw its share price fall below 100p for the first time. Only the installment of a new chairman, Richard Evans, and an emergency rights issue saved the company from bankruptcy. It is interesting to note that The General Electric Company (GEC), later to sell its defence interests to BAe, came close to acquiring BAe at this time. Following the largest British corporate write-down (at the time) in 1992, BAe set about divesting some non-core interests.

Major milestones

Acquisitions made/divisions established

Divestitures

Transition to BAE Systems

Defence consolidation became a major issue in 1998, with numerous reports linking various European defence groups — mainly with each other but also with American defence contractors.

It was widely anticipated that BAe would merge with Germanyís DASA to form a pan-European aerospace giant, however BAe chose instead to merge with GECís defence electronics business, Marconi Electronic Systems. This move, to create a UK company compared to what would have been an Anglo-German firm, made the possibility of further penetration of the United States (US) defence market more likely.

The company, initially called "New British Aerospace", was officially formed on November 30, 1999 and known as BAE Systems.

Following that decision, DASA instead merged with Aerospatiale to create the European Aeronautic Defence and Space Company (EADS). This group was joined by Spainís CASA following an agreement in December 1999.

See also


Lists of Aircraft | Aircraft manufacturers | Aircraft engines | Aircraft engine manufacturers

Airports | Airlines | Air forces | Aircraft weapons | Missiles | Timeline of aviation

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