British Aerospace, often abbreviated to BAe, was an aerospace and defence company formed on 29th April 1977. This was a result of the Aircraft and Shipbuilding Industries Act which merged the British Aircraft Corporation, Hawker Siddeley Aviation, Hawker Siddeley Dynamics and Scottish Aviation into a nationalised company. The new company controlled a large part of the British aviation industry and was the largest defence contractor in Europe. In 1979 the company joined the Airbus consortium, acquiring a 20% share. The British government had previously withdrawn from this project although Hawker Siddeley had continued to be involved as a contractor producing wings for their aircraft. In 1981 the company underwent a major restructuring. On 1st January the statutory corporation was transferred to a limited company and this was reregistered as British Aerospace PLC. It was then gradually privatised as 51.6% of the shares were sold to the public in February with the remaining 48.4% being sold in May 1985. Despite this the British government retained a single golden share that gave them the power to block foreign control of the company. Also during 1985 BAe would be the primary contractor for the Al-Yamamah arms deal. During the late 1980s British Aerospace would become involved in serval joint ventures and acquired a number of companies which diversified its operations away from aircraft manufacturing. The first of these was undertaken in cooperation with Alenia Aeronautica, Construcciones Aeronáuticas SA and DaimlerChrysler Aerospace AG to form Eurofighter GmBH which would go on to develop the Eurofighter Typhoon. During 1991 it would also form another joint venture with the Sema Group to form a naval defence company, BAeSEMA. The company would also acquire Royal Ordnance on 22nd April 1987, the Rover Group in 1988, Heckler and Koch in 1991 and 30% share in Hutchison Telecommunications. Despite the expansion undertaken during the 1980s BAe would begin to suffer some difficulties during the early 1990s as its property company struggled, Rover sales dropped and the British government undertook a defence spending review. As a result the decision was taken to divest the company of its non-aerospace or defence activities. As a result in 1993 BAE Corporate Jets Ltd and Arkansas Aerospace Inc were sold to Raytheon and in 1994 the Rover Group was sold to BMW whist British Aerospace Space Systems were sold to Matra Marconi Space. As well as this in 1998 it reduced its shareholding in Orange to 5% and acquired the UK operations of Siemens Plessey Systems from Siemens AG. By the late 1990s the consolidation of defence companies was becoming a major issues especially in Europe. The formation of Lockheed Martin and the merger of Boeing and McDonnell Douglas put serious pressure on European companies to consolidate their operations. Initially it was thought that BAe would merge with DaimlerChrysler Aerospace AG but this was put on hold when it emerged that GEC was selling its defence electronics business, Marconi Electronic Systems. It was believed that this may be acquired by an American company. As a result the decision was taken to merge this company with British Aerospace forming a company that was initially known as New British Aerospace. The new company would be formed on 30th November 1999 under the name BAE Systems.

Rolls-Royce Limited was established by Charles Rolls and Henry Royce in 1904. The company designed and built luxury cars and with the help of Henry Royce’s previous experience in building cranes, it soon gained widespread reputation for engineering excellence. During the First World War Rolls-Royce added building aero engines to its skills. This enabled them to later become involved in the development of jet engines. They worked engines for both the civilian and military market. However, a costly over-run in designing and building the RB211 civilian aircraft engine brought the company to financial ruin. Even though the RB211 proved a great success in 1971 the owners of the company entered voluntary liquidation. The government of the day bought the productive parts of the company which became known as Rolls-Royce (1971) Limited. Portions of the company were sold to British Aircraft Corporation and transferred the profitable car division to Rolls-Royce Motors Holdings Limited. In 1987 Rolls-Royce Ltd was privatised and subsequently became Rolls-Royce plc. The Rolls-Royce Motors brand was bought by BMW in 1998.