30 November 1999: BAE Systems formed in £7.7bn merger
On this day in 1999 British Aerospace merged with Marconi Electronic Systems to form BAE Systems, one of the biggest arms manufacturers in the world.
When thinking of international business successes, it's unlikely that the name “Marconi” is in anyone's minds. After all, Marconi Plc, the telecoms company and successor to GEC, imploded spectacularly after the dotcom bubble, after a series of disastrous management decisions. But there was another Marconi – Marconi Electronic Systems – that had been spun off from GEC, and went on to form half of one of the world's biggest arms manufacturers (or defence companies, if you prefer).
The last years of the 20th century saw huge consolidation in the defence industry. Boeing and McDonnell Douglas merged, and Lockheed Martin was formed by the merger of Lockheed and Martin Marietta. Europe had designs on a consolidated defence company of its own, which eventually became EADS, then Airbus.
Britain was not to be left out. We had our own defence and aerospace companies in British Aerospace (BAe), which, as the name implied, built planes. Marconi built radar and other electronic systems for the space and naval sectors. BAe was considering a merger with Germany's Daimler Chrysler Aerospace. But when GEC put Marconi up for sale, BAe feared it would be acquired by a US company and pose a threat.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
And so on this day in 1999, British Aerospace and Marconi Electronic Systems merged, in a £7.7bn deal, and BAE Systems was formed. It makes everything from fighter jets to tanks and warships, and is now Europe's biggest defence company, with sales in 2011 of some $21bn, says Forbes.
Among world arms companies it is the fifth biggest in terms of sales, after Lockheed Martin, Boeing, Northrop Grumman, Raytheon and General Dynamics. The bulk of its business comes from the US, where it owns several subsidiaries. The UK is its second-biggest market. A smaller but still very significant market is Saudi Arabia. Its highly controversial and politically sensitive £40bn Al Yamamah oil-for-arms deal was the focus of several corruption investigations, including by the Serious Fraud Office and the US government.
Sign up to Money Morning
Our team, led by award winning editors, is dedicated to delivering you the top news, analysis, and guides to help you manage your money, grow your investments and build wealth.
Ben studied modern languages at London University's Queen Mary College. After dabbling unhappily in local government finance for a while, he went to work for The Scotsman newspaper in Edinburgh. The launch of the paper's website, scotsman.com, in the early years of the dotcom craze, saw Ben move online to manage the Business and Motors channels before becoming deputy editor with responsibility for all aspects of online production for The Scotsman, Scotland on Sunday and the Edinburgh Evening News websites, along with the papers' Edinburgh Festivals website.
Ben joined MoneyWeek as website editor in 2008, just as the Great Financial Crisis was brewing. He has written extensively for the website and magazine, with a particular emphasis on alternative finance and fintech, including blockchain and bitcoin.
As an early adopter of bitcoin, Ben bought when the price was under $200, but went on to spend it all on foolish fripperies.
-
Best funds to add to your ISA or SIPP before the Budget
With Labour expected to increase taxes, ISAs and SIPPs could be a great way to protect yourself from CGT hikes. We look at the best funds to buy now
By Katie Williams Published
-
Starling Bank slapped with £29 million fine over ‘shockingly lax’ financial crime controls
The Financial Conduct Authority has fined Starling Bank £29 million over failings related to financial crime and its financial sanctions screenings
By Kalpana Fitzpatrick Published
-
31 August 1957: the Federation of Malaya declares independence from the UK
Features On this day in 1957, after ten years of preparation, the Federation of Malaya became an independent nation.
By Jasper Spires Published
-
13 April 1960: the first satellite navigation system is launched
Features On this day in 1960, Nasa sent the Transit 1B satellite into orbit to provide positioning for the US Navy’s fleet of Polaris ballistic missile submarines.
By Ben Judge Published
-
9 April 1838: National Gallery opens in Trafalgar Square
Features On this day in 1838, William Wilkins’ new National Gallery building in Trafalgar Square opened to the public.
By Ben Judge Published
-
3 March 1962: British Antarctic Territory is created
Features On this day in 1962, Britain formed the British Antarctic Territory administered from the Falkland Islands.
By Chris Carter Published
-
10 March 2000: the dotcom bubble peaks
Features Tech mania fanned by the dawning of the internet age inflated the dotcom bubble to maximum extent, on this day in 2000.
By Chris Carter Last updated
-
9 March 1776: Adam Smith publishes 'The Wealth of Nations'
Features On this day in 1776, Adam Smith, the “father of modern economics”, published his hugely influential book The Wealth of Nations.
By Ben Judge Last updated
-
8 March 1817: the New York Stock Exchange is formed
Features On this day in 1817, a group of brokers moved out of a New York coffee house to form what would become the biggest stock exchange in the world.
By Chris Carter Last updated
-
7 March 1969: Queen Elizabeth II officially opens the Victoria Line
Features On this day in 1969, Queen Elizabeth II took only her second trip on the tube to officially open the underground’s newest line – the Victoria Line.
By Ben Judge Last updated