BAE Systems, EADS Missile Venture Wins $393 Million U.K. Deal

The U.K. government plans to spend 250 million pounds ($393 million) to field a new air-defense system to protect future BAE Systems Plc-made Type 26 combat ships from air and missile attack.

The contract to start producing the Sea Ceptor will be placed with MBDA, a joint venture of European Aeronautic, Defence & Space Co., BAE Systems and Finmeccanica SpA (FNC), U.K. defense minister Philip Hammond said today at the DSEI military conference in London.

The Sea Ceptor program is a new ship air-defense initiative for deployment first on Royal Navy Type 23 frigates in 2016 and later equipping the replacement Type 26. MBDA secured a 483 million-pound development contract last year from the U.K. government to work on the missile that can fly at three times the speed of sound.

“This state-of-the-art missile system is part of an exciting renaissance in our naval equipment program,” First Sea Lord Admiral George Zambellas said in a statement. “When fitted to Royal Navy frigates it will further enhance our global authority as a leading maritime power.”

The U.K. is also exploring land-based use of the Sea Ceptor missile or a potential airborne derivative. Those aren’t yet being procured under the new contract, said Steve Wadey, head of MBDA in the U.K. The weapon also has “very substantial” export potential, he said.

The U.K. has also extended an agreement, first finalized in 2010, to work with MBDA across a range of weapons programs to deliver 1 billion pounds of savings.

To contact the reporter on this story: Robert Wall in London at rwall6@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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