BAE SYSTEMS and VT Group will this week formally seal a joint venture to build two Royal Navy aircraft carriers that has been nearly two years in the making.

The pair are expected to sign on Tuesday before the government officially places its £4 billion order on Thursday at a ceremony in Portsmouth aboard HMS Ark Royal.

In attendance will be Baroness Taylor, the minister for defence equipment and support, and Sir John Parker, who will chair the venture. To be called BVT, it will be 55%-owned by BAE, with the balance in the hands of VT, which has an option to sell its stake to BAE for at least £380m.

Alan Johnston, formerly the boss of Agusta Westland, will be BVT’s chief executive. The deal includes a 15-year partnership with the Ministry of Defence.

Des Browne, the defence secretary, will attend a separate event in Scotland to mark the involvement of the Govan and Rosyth shipyards in the project.

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