BAE and VT agree jv terms

BAE Systems and VT Group have agreed the terms on which to merge their shipbuilding interests, but an announcement has been delayed by political uncertainties over plans for the Royal Navy’s new aircraft carriers.

Sir John Parker, chairman of the National Grid, is lined up to take the same role at the merged business, in which BAE would hold 55% and VT the rest. After three years, VT would have a “put” option to sell its stake to BAE at a minimum guaranteed price.

The two companies are unable to announce the joint venture formally because it is dependent upon the Ministry of Defence and the Treasury agreeing a £3.9bn contract to build two aircraft carriers.