BRITISH Aerospace has said its planned takeover of GEC's defence arm was on track to produce more than £275million in cost savings.

The defence giant said it had earmarked November 29 as the completion date for the merger with Marconi Electronic Systems - a deal which will create the world's third largest aerospace and defence company. Assuming the deal could be completed by the set date, the group said it would achieve "in excess of £275million in cost savings by the year ending December 31, 2002."

The company said £55million of cost savings would be achieved next year and £150million in 2001. Plans for the takeover were revealed by BAe in January, when it said it expected the merger to be finalised by this summer.

However, delays in getting regulatory clearances from UK and US authorities have held up the merger process.

The merger of GEC's defence arm with BAe is expected to create a company worth about £17billion, with sales of £12.5billion.

Worldwide, it will employ 112,000 staff, about 70,000 of whom are in the UK.

Staff at the newly-created British giant will range from Trident submarine workers in Barrow-in-Furness to Airbus workers in Chester and Bristol.

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