Nov 1 (Reuters) - Europe's biggest defence contractor, BAESystems PLC, has agreed to buy a 20 percent stake inrocket engine maker Reaction Engines for 20.6 million pounds($31.82 million), the Financial Times reported.
The investment would enable BAE to gain a seat on Reaction'sboard and become its preferred supplier, the newspaper said. (http://on.ft.com/1Ws6Qsn)
BAE buying into Reaction Engines is a vote of confidence inits technology and BAE's involvement would bring new skills andknow-how to perfect the rocket company's space propulsiontechnology, David Parker, head of the UK Space Agency, told thepaper.
The investment would unlock a 60 million-pound grant fromthe UK government and, together wih BAE's investment, thecompany would have "no immediate funding needs", the FT quotedMark Thomas, Reaction Engines' managing director, as saying.
BAE Systems and Reaction Engines could not immediately bereached for comment outside regular UK business hours. ($1 = 0.6474 pounds) (Reporting by Ankush Sharma in Bengaluru; Editing by JonathanOatis)