Subject only to regulatory approval, Finmeccanica and GKN have finalised an agreement to merge their helicopter businesses. While the new company will be known as AgustaWestland, Italy's Finmeccanica and the UK's GKN will each own 50 per cent of the joint venture, post completion.

In a joint statement, Finmeccanica and GKN said: "This is a world-class alliance of equals united by the same strategic vision - to deliver outstanding products and services to our customers and to maximise value for our shareholders.

"With combined 1999 revenues of more than $2.1 billion and a civil and defence order book of $8 billion, it will be a powerful force in the world helicopter industry. It is a leader in a number of very important helicopter programmes and has an impressive pipeline of new products and technologies."

Keith Smith, an executive director of GKN and managing director of its aerospace business will, in addition to his existing responsibilities, become the first chairman of the new company. Amedo Caporaletti, currently president and chief executive of Agusta, will be its first chief executive. Subject to approval of the EU competition authorities, Finmeccanica and GKN expect that the new company will become fully operational in the autumn.