Brussels, 18/10/2007 (Agence Europe) - On 17 October 2007, the European Commission authorised the planned creation of a joint venture for naval surface shipbuilding and related support services between BAE Systems plc and VT Group plc, both of the UK. The new entity would bring together the two remaining UK companies having the capability of designing and building naval surface ships. BAE designs, manufactures and supports military aircraft, surface ships, submarines, combat vehicles, radar, avionics, communications, electronics and guided weapons systems. VT Group plc (VT) is a support services and shipbuilding group supplying services and products worldwide.
The Commission's investigation showed that there has been little if any competition between BAE and VT, as each company has focussed on different classes of ships. In the past ten years BAE and VT have never bid against each other for the design and build of a naval surface ship in the European Economic Area (EEA). The Commission concluded that the operation would have a limited effect. The Commission's investigation confirmed that existing arrangements between the UK Ministry of Defence and market participants in naval support would not be affected by the creation of the joint venture. The position of the UK Ministry of Defence as the sole customer in the UK gave it the ability to influence the sub-contracting process for naval systems and weapons in such a way that BAE's competitors would still have access to the upstream market.
BAE and VT are the only British companies currently able to build surface ships and are already present on the shipbuilding services market through their joint venture Fleet Support Limited (FSL), which will be integrated into the new company. (C.D.)