View all newsletters
Receive our newsletter – data, insights and analysis delivered to you
  1. News
August 19, 2008

MoD Secures Royal Ordnance Future With £2bn Deal

The UK's Ministry of Defence (MoD) has agreed a £2bn deal with BAE Systems to secure the future of the historic Royal Ordnance unit. BAE Systems own Royal Ordnance and has been in negotiations with the MoD over the contract for two years. The 15-year contract will allow B

By cms admin

The UK’s Ministry of Defence (MoD) has agreed a £2bn deal with BAE Systems to secure the future of the historic Royal Ordnance unit.

BAE Systems own Royal Ordnance and has been in negotiations with the MoD over the contract for two years.

The 15-year contract will allow BAE to invest in the royal Ordnance factories, which date from the Second World War.

Having secured the future of the unit, BAE may look to sell the division.

Government sources suggest that BAE chief executive Mike Turner has been in contact with rival companies that may be interested in the division, however, it is not for sale at present.

Royal Ordnance was bought by BAE in 1987 and forms part of their land and armaments business.

Since the purchase, Royal Ordnance has lost money and closed factories, leaving only three in the UK.

BAE Systems threatened to close the business if the MoD did not offer a long-term contract that would allow it to upgrade facilities and make a profit.

By Daniel Garrun.

Related Companies

NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. The top stories of the day delivered to you every weekday. A weekly roundup of the latest news and analysis, sent every Monday. The defence industry's most comprehensive news and information delivered every month.
I consent to GlobalData UK Limited collecting my details provided via this form in accordance with the Privacy Policy
SUBSCRIBED

THANK YOU