BAE and VT seal carrier deal
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BAE Systems and VT Group have finally signed the long-awaited final agreement on the formation of their surface shipbuilding and naval support joint venture company to be called BVT Surface Fleet Limited (BVT).
BVT will combine VT’s and BAE Systems’ respective surface warship and through-life naval support businesses and will be owned 45 per cent by VT and 55 per cent by BAE Systems. The partners will have equal board representation and voting rights in BVT.
On completion of the formation of BVT, VT will acquire from BAE Systems the remaining 50 per cent of Flagship Training Limited that it does not already own for £65 million. A further £10 million will be paid by VT or repaid to VT depending on the performance of the business.
The formation of BVT is the prelude to a full manufacturing contract for the aircraft carrier (CVF) programme, which will be signed by the Ministry of Defence (MoD) and BVT shortly. BVT will also sign a 15 year partnering arrangement with the MoD. This arrangement will guarantee BVT’s leadership of defined future programmes with respect to design, build and through-life support. BVT will operate facilities in Bristol, Glasgow and Portsmouth.
VT and BAE Systems have appointed Sir John Parker as the non-executive Chairman designate and Alan Johnston as Chief Executive designate of BVT. Sir John is also non-executive Chairman of National Grid plc and Mr Johnston was previously Managing Director at AgustaWestland.
VT said it believed that the transactions will provide it with the financial flexibility to continue to pursue value enhancing acquisitions which are complementary to its diversified support services operations.
VT Group Chief Executive Paul Lester said the formation of BVT would create a world class provider of naval ships and through-life support that would secure thousands of jobs in the UK and enable the company to compete effectively for export work.
He added: “Placing our shipbuilding and naval support businesses in a large JV is a major strategic move that will allow us to focus more time on growing our engineering-based support services businesses.
“Securing full ownership of Flagship Training is another important step in this process as we become a major support services organisation.”
