Three companies have been running AWE Management, which controls the Atomic Weapons Establishment, since 2000.

The UK Department of Defense will regain direct control of the operation and development of the country’s nuclear weapons by a consortium of Lockheed Martin, Serco and Jacobs Engineering in June 2021, Serco said Monday.

The three companies have run a unit called AWE Management since 2000, which controls the Atomic Weapons Establishment. Lockheed Martin holds 51 percent and Serco and Jacobs each hold 24.5 percent.

“The change to the model will break the current trade agreements and improve the Department of Defense’s agility in addressing the UK’s future nuclear deterrence, while meeting the Department of Defense’s key goals and value for money for the taxpayer,” the said Government.

Serco informed the UK Department of Defense late Friday that AWE plc would move back under the direct control and administration of the Department of Defense as of June 30, 2021.

AWE is based in Aldermaston in the south of England and maintains the warheads for Trident’s nuclear deterrent. She needs to retain the ability to develop a new weapon should she ever need to.

Serco’s shares fell 13 percent in early deals on Monday after the company announced it would lose the deal.

The company announced that AWE is expected to contribute approximately £ 17 million ($ 22 million) to both underlying trading profit and pre-tax profit in 2020.

However, assuming a smooth handover next year, the company expected earnings in 2021 to remain broadly in line with the current consensus and at a similar level to 2020 expectations.

Sky News, which first reported the news, said it was not clear whether the companies would receive compensation for canceling the 25-year contract, which was supposed to run through 2025.

Jefferies analysts said they expected some compensation as the consortium has now met its goals after a period of underperformance about five years ago.

The Department of Defense did not immediately respond to a request for comment.


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