In its most recent annual report BAE Chairman Dick Olver said the group’s main strategic aims included developing its export business, building on its large geographic footprint and pushing growth at its cyber security arm.
“BAE Systems maintains a well-defined strategy with a defence focus at its core, but with the flexibility to adapt to changes in the business landscape,” wrote Olver.
“BAE Systems will continue to keep its strategy under review and will move to adjust its portfolio of businesses where it is in the interests of shareholders to do so.”
BAE is precluded from making statements that relate to the proposed EADS merger because of UK takeover panel rules.
In 2006, BAE sold its remaining 20 percent stake in Airbus for $3.5 billion to fund its big move into the then booming U.S. defence industry.
It had created a standalone U.S. business, BAE Inc, a year earlier which has since become one of the largest suppliers of weapons to the United States.
BAE Inc has grown through acquisitions and now competes toe-to-toe with prime U.S. contractors such as Lockheed, Northrop Grumman and Boeing. It reported revenues of $14.4 billion last year - around half of BAE total group sales.
“If a merger doesn’t happen BAE are basically in play and a U.S. tie-up is possible but in that scenario I think BAE should sell its U.S. business,” said Societe Generale’s Khan, who believes that BAE Inc could fetch up to 10 billion pounds ($16.20 billion) on a debt free basis.