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The Hampshire, UK-based fourth largest defence and aerospace company, BAE Systems decided to sell its 20% Airbus stake for £1.87 billion to EADS (European Aeronautic Defence and Space Company). Airbus was going through crisis due to the delivery delays of the super jumbo A380. Moreover, the valuation of BAE''s stake was very low at £1.87 billion, half of what BAE expected. In the industry of defence and aerospace, governments play a major role by funding the projects and also at times being the major customer. BAE''s sale of the Airbus stake marked an end of Britain''s contribution in European commercial aircraft manufacturing and thereby led to pressure from the Government. In addition, BAE was considering focusing on the American defence market. The proceeds from the sale of its Airbus stake were expected to be invested in developing its American business. Many analysts viewed BAE''s step as a wrong move. BAE''s decision to quit the commercial aircraft market altered its relations with the home government. The case aims to discuss the corporate goals and steps taken by the company in line with its strategy.