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BAE Systems in US intelligence deal

Defence giant BAE Systems has announced a multimillion-pound deal to buy part of an American intelligence business in a move that will see former CIA and FBI workers join the company.

The group will buy three divisions of L-1 Identity Solutions, which all deal with security issues such as counter-terrorism, identity theft and money laundering, for 295.8 million US dollars (£189.3 million).

The three arms - SpecTal, Advanced Concepts and McClendon - all work alongside the intelligence sector in the US, providing consultancy, IT and engineering services to the industry.

SpecTal - which has former staff from the FBI and CIA on its team, as well as former members of the US Army - offers training services to Government defence staff.

The acquisition, which will see more than 1,000 staff join BAE Systems, comes as the company prepares itself for looming Government cuts to the UK defence budget. Earlier this month, it announced plans to axe nearly 1,000 jobs in the UK following changes to the defence programme announced last year.

The US accounts for half of its business, whereas the UK represents 20%.

Earlier this month, it was reported that BAE chief executive Ian King was looking to build a "war chest" for acquisitions ahead of an expected consolidation in the American defence sector.

The company said it was considering selling its US-based Platform Solutions unit, which makes electronic components for the commercial and defence sectors, in a move that could raise £1.3 billion.

The proposed acquisitions would involve working alongside US Department of Defence and US Department of Homeland Security.

The three divisions will join BAE's Intelligence and Security sector, which is based in Arlington, Virginia, and falls under BAE's "customer support and services" area - which generated 49% of group revenues in the first half of the year.

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