BAE Systems, Abu Dhabi mull aerospace business

ABU DHABI (Reuters) - BAE Systems BA.L and Abu Dhabi government-owned Mubadala Development Company are in talks to develop an aerospace business in the UAE, the regional head of the British defense company said on Sunday.

"They (Mubadala) have indicated to us that one of the areas of potential interest to the UAE is to develop an expertise in aerospace and asked us if we'd be a partner to that and we have said 'yes'," Simon Keith, regional managing director of BAE Systems, told Reuters on the sidelines of a defense conference in Abu Dhabi.

The exact nature of the joint venture is not yet determined, he said.

"Whether it would be a niche role for us - materials, electronics, manufacturing or assembly, Mubadala is evaluating it. BAE will encourage its aerospace partners from the UK to join in as well."

The Middle East accounts for between 16 to 20 per cent of the total turnover of BAE Systems, he said.

"We are seeing a gentle increase in Middle East sales over the last few years. Such growth will continue and might rise a little over the next five years," he said.