BAE Systems plays down warnings that it could switch to US

BAE Systems plays down warnings that it could switch to US

	Published : Thu, 19 Apr 2007 15:52 By : Agencies Print this Story

LONDON (Thomson Financial) - Defence and aerospace group BAE Systems PLC played down fears Thursday that its growing American business would eventually lead it to base itself in the US.

A spokeswoman for BAE said it was a global company 'focused equally on all its markets' in response to a report in the Financial Times in which the chairman of France's Defence Economic Council, Philippe Esper, warned that it was vital for Europe's defence industry that BAE remained a British company.

If BAE moved to the US, it would be 'embarrassing for British industry and it would be embarrassing for Europe,' Esper, a senior adviser to the French defence ministry, told the FT.

BAE has been pursuing an expansion strategy in the US to cash in on increases in the US defence budget and there has been speculation that it would face demands on grounds of corporate governance to base itself there if 50 pct of its turnover and shareholder base originated in the US.

BAE made 39 pct of its turnover in the US in 2006 and about 30 pct of its shareholder base is currently based in the US.

The BAE spokeswoman told Thomson Financial News' partner agency Agence France-Presse that BAE was 'a world company with six national markets including the UK, Sweden, Saudi Arabia, South Africa and Australia.'

'Even though the US is an important market for BAE due to the size of the American defence budget and an important part of our turnover comes from that, the group is focused equally on all its markets,' she said.

The spokeswoman recalled comments made by the company's director of strategy Alison Wood at last year's Farnborough Air Show, in which Wood said she 'did not envisage BAE being in the situation (where it would become American) during the next ten years.'

philip.waller@thomson.com

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