The multinational defence and aerospace company had been with Bell Pottinger Corporate and Financial (BPCF) for six years.
It is understood that the account was worth up to £400,000 a year in fees to Bell Pottinger, with various project work making up around half that figure.
A senior agency source said that losing the account was a ‘significant blow’ for Bell Pottinger in financial terms and particularly prestige as BAE had been the agency’s highest profile client.
Bell Pottinger was invited to participate in the pitching process, but BPCF MD Stephen Benzikie said: ‘On this occasion we decided not to repitch.’
The change of agencies follows the departure of BAE’s chief executive Mike Turner, in the summer, who had worked closely with BPCF and its chairman Piers Pottinger.
BAE invited nine agencies to participate in the two-stage pitch process and selected FD from a final pitch-list that included fellow City heavyweights Maitland and Finsbury.
The UK-focused account will be led by FD financial comms MD Jonathon Brill, himself ex-Bell Pottinger.
Brill will report to Charlotte Lambkin, BAE group communications director. Lambkin left Bell Pottinger for BAE in 2004.
The development does not affect Bell Pottinger’s public affairs contract with BAE, which is set to run until March 2009.
The agency is likely to fight hard to hang on to this part of the business, having rec-ently lost major public affairs clients such as HSBC, Mc-Donald’s, eBay and Asda.
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