BAE Systems is among four companies bidding for ownership of Australia’s second largest defence company, Tenix.
Tenix is selling its defence division as it cannot provide sufficient investment in technology and new equipment to rival foreign defence firms.
Last year the company reported sales of A$680m.
UK newspaper The Times reports BAE has entered due diligence negotiations with the company in a deal which could be worth over A$1bn.
Other companies involved in the final round of bidding are believed to be American company L3, private equity firm Carlyle Group and Australian industrial group Leighton Holdings.
BAE has previously identified Australia as one of its six home markets and has expressed interest in expanding its role in the country.
By staff writer