Marconi Electronic Systems (MES), or GEC-Marconi as it was until 1998, was the defence arm of The General Electric Company (GEC). It was demerged from GEC and acquired by British Aerospace (BAe) on November 30, 1999 to form BAE Systems. GEC then renamed itself Marconi plc.
MES exists today as BAE Systems Electronics Limited, a subsidiary of BAE Systems, but the assets were rearranged elsewhere within that company. MES-related businesses include BAE Systems Submarine Solutions, BAE Systems Surface Ships, BAE Systems Insyte and SELEX Galileo (now owned by Finmeccanica).
MES represented the pinnacle of GEC's defence businesses which had a heritage of almost 100 years. Following GEC's acquisition of Marconi in 1968 the Marconi brand was used for its defence businesses e.g. Marconi Space & Defence Systems (MSDS), Marconi Underwater Systems Ltd (MUSL). GEC's history of military products dates back to World War I with its contribution to the war effort then including radios and bulbs. World War II consolidated this position with the company involved in many important technological advances, most notably radar.
Between 1945 and GEC's demerger of its defence business in 1999, the company became one of the world's most important defence contractors. GEC's major defence related acquisitions included Associated Electrical Industries in 1967, English Electric Company (including its Marconi subsidiary) in 1968, Yarrow Shipbuilders in 1985, parts of Ferranti's defence business in 1990, Vickers Shipbuilding and Engineering in 1995 and Kvaerner Govan in 1999. In June 1998, MES acquired Tracor, a major American defence contractor, for $1.4bn.
The 1997 merger of American corporations Boeing and McDonnell Douglas, which followed the forming of Lockheed Martin, the world's largest defence contractor in 1995, increased the pressure on European defence companies to consolidate. In June 1997 British Aerospace Defence Managing Director John Weston commented "Europe... is supporting three times the number of contractors on less than half the budget of the U.S.". European governments wished to see the merger of their defence manufacturers into a single entity, a European Aerospace and Defence Company.
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