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UPDATE 1-BAE Systems lines up oil executive Woodburn as next CEO

Mon, 15th Feb 2016 09:09

* Oil executive appointed BAE chief operating officer

* Seen in line to succeed Chief Executive King

* Succession path mirrors one followed by King (Adds background, analyst comment, share price)

By Sarah Young

LONDON, Feb 15 (Reuters) - British defence firm BAE Systems named Charles Woodburn as its chief operating officer,making the former oil executive heir apparent for the chiefexecutive's role.

BAE's statement on Monday followed media reports on Sundaythat Woodburn would be appointed to the role before taking overthe top job from Ian King in 12 to 18 months. King has run BAEsince 2008 having formerly been chief operating officer.

Woodburn, 44, who formerly worked at oilfield servicescompany Schlumberger and is currently chief executive atprivate equity-backed Expro, will join in the second quarter of2016 and be paid a base salary of 750,000 pounds ($1.1 million).

King highlighted Woodburn's international focus as anadvantage for BAE, the third biggest defence company globally,which makes over a third of its sales in the U.S. and Canada,and a fifth in Saudi Arabia.

"As a highly qualified engineer with considerableinternational business experience, Charles will strengthen andbroaden the strategic and operational capabilities of thebusiness as a welcome and valuable addition to the leadershipteam," King said in a statement.

Chairman Roger Carr said that Woodburn would build up hisunderstanding of the defence industry under King, calling hisappointment "part of our succession planning programme."

Woodburn will need to get to grips with BAE's biggestcustomer -- Britain's ministry of defence -- as the companytakes part in a 31 billion pound programme to build thereplacement for the country's nuclear submarines.

BAE is expected to benefit from rising military spending inBritain and the U.S., after years of cutbacks, and new demandfor its cyber defence services.

But it also faces challenges. It is under pressure from theBritish government to deliver big, complicated projects like thebuilding of two new aircraft carriers on budget, and to secure along-delayed sale of a new batch of Typhoon fighter jets toSaudi Arabia to extend its production further into the future.

KeplerCheuvreux analyst Christophe Menard said theappointment was positive for BAE.

"Seeking an outsider could bring a fresh vision to BAE,which needs to reinvent and re-position part of its business,after years of difficulty budgetary environments," he said.

Woodburn, who has a PhD in engineering from the Universityof Cambridge, will also be paid 1.62 million pounds earnt atExpro but forfeited as a consequence of joining BAE.

The company's shares traded up 1.9 percent to 475 pence,broadly in line with the FTSE 100 index. BAE is scheduled toreport annual results on Thursday. ($1 = 0.6889 pounds) (Reporting by Sarah Young; Editing by Paul Sandle and KeithWeir)

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