UPDATE 2-BAE reaches $450 mln settlement with U.S., Britain

* To pay $400 million fine in U.S. DoJ agreement

* To pay 30 million pounds in UK SFO agreement

* BAE shares up 2.2 percent

(Adds detail from statement, analyst comment, background)

LONDON, Feb 5 (BestGrowthStock) – BAE Systems Plc (BAES.L: ), Europe’s
biggest defence contractor, will pay around $450 million in
fines to end a long-running corruption investigation on both
sides of the Atlantic.

Under a settlement with British and U.S. authorities
announced on Friday, the company will plead guilty to one charge
of conspiring to make false statements to the U.S. government in
connection with regulatory filings and one charge of breach of
duty in relation to accounting records of payments made in
Tanzania.

“The company very much regrets and accepts full
responsibility for these past shortcomings. These settlements
enable the company to deal finally with significant legacy
issues,” Chairman Dick Olver said in a statement.

BAE shares were up 2.2 percent at 1618 GMT, as the market
welcomed news of the fine, which was not as high as some had
feared.

“While it’s a substantial figure, it’s less than the worse
case scenario,” said analyst Tina Cook at brokerage Charles
Stanley, noting initial media reports had suggested a figure of
up to 1 billion pounds ($1.6 billion) from Britain’s Serious
Fraud Office (SFO) along, later revised down to between 200
million and 300 million.

“It also removes an overhang on the share price caused by
uncertainty about the investigations”.

In October, when the SFO said it was prepared to prosecute
BAE for bribery but stopped short of formally requesting a
criminal trial, legal experts said the company could face
penalties of “hundreds of millions” of pounds if found guilty.

Some lawyers said the SFO would want to show it had teeth by
following the lines of Germany and the United States in dealing
with international corruption. [ID:nL1601628].

In late 2008 German industrial conglomerate Siemens
(SIEGn.DE: ) agreed to pay just over $1.3 billion to settle
corruption probes. [ID:nN15508680]

SFO director Richard Alderman said in a statement: “I am
very pleased with the global outcome achieved
collaboratively with the DoJ (Department of Justice). This is a
first and it brings a pragmatic end to a long-running and
wide-ranging investigation.”

A previous investigation by the SFO into reports BAE paid
about 1 billion pounds over a decade to Prince Bandar bin Sultan
in connection with the al-Yamamah arms deal was halted in
December 2006 by former Prime Minister Tony Blair after the
probe angered Saudi Arabia.

Authorities had cited the risks the inquiry posed
to Britain’s relationship with the oil kingdom, but the move
attracted sharp criticism by anti-bribery campaigners and
British media.

Investing Basics

(Reporting by Rosalba O’Brien, Paul Sandle and James Davey;
Editing by David Holmes)
($1 = 0.6363 pound)

UPDATE 2-BAE reaches $450 mln settlement with U.S., Britain