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Herbert Smith Freehills has advised Reaction Engines Limited on a strategic minority investment from BAE Systems. As a part of the transaction, the two companies will be entering into a working partnership to accelerate the development of SABRE (Synergetic Air-Breathing Rocket Engine) – a new aerospace engine class that combines both jet and rocket technologies with the potential to revolutionise hypersonic flight and space access.

This new class of aerospace engine is designed to enable aircraft to operate from standstill on the runway to speeds over five times the speed of sound in the atmosphere. SABRE can then transition to a rocket mode of operation allowing spaceflight at speeds of up to orbital velocity, or twenty five times the speed of sound.
Under the terms of the agreement, BAE Systems will invest over £20 million for a minority stake in Reaction Engines, enter into a preferred supplier relationship with Reaction Engines in certain agreed areas and have representation on Reaction Engines' board. The transaction is subject to the approval of Reaction Engines' shareholders.
The Herbert Smith Freehills team was led by London-based corporate partner Gavin Davies, with input from partners Adrian Clough and Isaac Zailer. Gavin was supported by associates Sid Shukla, Patrick Roux and Ryan Conroy. 
Gavin commented: "We are very pleased to have assisted on what is a milestone transaction for Reaction Engines. We look forward to continuing our close relationship with the company as they enter an exciting stage in the development of a ground-breaking technology – SABRE."
US law advice for Reaction Engines was provided by Covington & Burling LLP. Eversheds LLP advised BAE Systems on the transaction.

Key contacts

Gavin Davies photo

Gavin Davies

Head of Global M&A practice, London

Gavin Davies
Isaac Zailer photo

Isaac Zailer

Partner, London

Isaac Zailer