BAE Systems is the world's second largest arms producer. Its portfolio includes fighter aircraft, warships, tanks, armoured vehicles, artillery, missiles, small arms ammunition and CS gas.
BAE's deals
BAE's arms are sold indiscriminately around the world. The company has military customers in over 100 countries and around 95% of its sales are military (SIPRI).
A notorious recent deal was the sale of 200 Tactica armoured vehicles to Saudi Arabia. These vehicles were used by Saudi troops helping to suppress pro-democracy protests in Bahrain in March 2011 (Jane's Defence Weekly, 23.3.2011).
BAE has over 5,000 staff in Saudi Arabia and provides operational support to the armed forces including the Saudi air force, which bombed Yemen in 2009, and the Tactica armoured vehicles.
The Economist Intelligence Unit publishes a "democracy index". The most recent index, reflecting the situation in late 2010, saw Saudi Arabia assessed as more authoritarian than Syria, Libya and Iran. In fact, only the Central African Republic, Burma, Uzbekistan, Turkmenistan, Chad and North Korea were assessed as worse.
BAE's strategy
BAE targets wherever it thinks it can make profit. The repressive Saudi Arabian regime and the UK Ministry of Defence are long-term customers.
In the mid-2000s, BAE's drive to profit from the conflicts in Afghanistan and Iraq led it to purchase two major US armoured vehicle producers.
However, with the peak of US intervention in Iraq and Afghanistan passing, BAE has been on the look out for the next big opportunity. "Cyber and intelligence" looks to be it, and BAE has purchased a raft of cyber security companies across its "home markets".
Corruption investigations
In 2010, the US Department of Justice (DoJ) agreed a plea bargain with BAE. The company was sentenced
to pay a $400 million criminal fine, one of the largest criminal fines in the history of DOJ's ongoing effort to combat overseas corruption in international business and enforce U.S. export control laws.
The fine covered corruption on arms deals with Saudi Arabia, the Czech Republic and Hungary, although BAE only had to admit to making false statements in regulatory filings.
The longer-run UK Serious Fraud Office investigation was left with, as Private Eye put it, "the crumbs of a £30m settlement over BAE's corrupt Tanzanian radar system contract." In this instance, BAE only had to admit to false accounting.
More information on the investigations and plea bargains, including links to relevant documents is available here.
A 'UK' company?
BAE is an international company with five "home markets" and arms production in several others. The largest of the home markets are is the US, followed by the UK. The others are Australia, India and Saudi Arabia.
BAE's 2010 Annual Report stated that it continues to look for further home markets, focusing on South America and Asia.
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