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As well as internal reorganisation, BAe also began to form alliances with other companies in the arms sector; in October 1993 a joint venture company was formed with GEC-Marconi to ‘manage and develop their involvement in the naval Principal Anti-Air Missile System guided weapons project.'[11] This reflected the increasing trend for co-operation between companies in the sector.

All was not necessarily rosy with the new company, however, with a profits warning issued on January 10, 2001, wiping away a quarter of the company’s value on the stockmarket.[14] New developments have, however, made the company’s future look bright.

However, BAE SYSTEMS’ ambition to merge with Boeing or Lockheed has been ruled out by the US government.[8] Nevertheless, its desire to break into the US market, by far the largest in the world for arms companies, continues unabated.

British Aerospace (BAe) was first formed as a nationalised corporation in April 1977 by the merger of the British Aircraft Corporation, Hawker Siddeley Aviation, Hawker Siddeley Dynamics and Scottish Aviation.

State control over the arms trade didn’t survive for very long under the Thatcher government, however, with the UK Government selling 51.57% of its shares in BAe in 1981, upon its formation as a public limited company (PLC).

In 1985, the UK Government sold its remaining shares, keeping only a special £1 share in order to ensure that the company continues under British control (foreign ownership of BAE SYSTEMS is limited by law to 29.5%).

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