Door Opens for British Aerospace as U.S. Supplier

British Aerospace said Thursday that the U.S. government has decided to treat it as an American firm in procurement decisions, and has encouraged it to make further acquisitions in the United States.

At an industry lunch, Chief Executive John Weston, noting that the firm would have more sales in the U.S. than in Britain once it completes its purchase of another British defense contractor, said: “We have been told that further acquisitions in the United States would be welcomed.”

British Aerospace shares rallied on the news, which suggests that the Pentagon decided to use the firm to inject competition into its supplier base, dominated by Boeing Co., Lockheed Martin Corp. and Raytheon Co.

Weston did not say when Washington made this decision, but he told reporters he had met U.S. Deputy Defense Secretary John Hamre two weeks ago.

The announcement makes the firm look confident that U.S. authorities will approve its proposed merger with the Marconi Electronic Systems unit of Britain’s General Electric, which is not related to the U.S. conglomerate General Electric Co.

Company officials said the name of the merged entity, getting rid of “British,” would be announced on Nov. 30. The acquisition would make British Aerospace one of the world’s top three defense companies, alongside Lockheed and Boeing, with extensive operations in the United States and continental Europe.