The British group knocked US defence giant Boeing out of the top position in 2008, according to the ranking of biggest defence groups worldwide tallied by the Stockholm International Peace Research Institute (SIPRI).

"The main reason that BAE became the largest arms-producing company in the world in 2008 is the increase in its US sales, which outpaced decreases elsewhere including in the UK," the think tank said in the study.

With arms sales in 2008 of 29.2 billion dollars (21.6 billion euros), Boeing fell from first place in 2007 to third following BAE Systems with 32.4 billion dollars and US group Lockheed Martin with 29.4 billion dollars.

It was followed by three US groups, Northrop Grumman, General Dynamics, and Raytheon, ahead of European group EADS in seventh place, Italian company Finmeccanica in eighth, L-3 Communications in ninth and Thales of France in tenth position.

The biggest Russian group on the list, air defence systems maker Almaz-Antei, was number 18 on the list.

In 2008, the 100 biggest defence groups had arms sales of 385 billion dollars, up 11 percent from the previous year, according to SIPRI.

"This is more than three times the size of the total development aid of OECD countries in 2008," SIPRI said, noting that such aid reached 120 billion dollars.

Putting the data in perspective, the think tank said that arms sales of Lockheed Martin alone topped US development aid by four billion dollars and that BAE Systems sales were greater than the gross domestic product of 105 countries.

SIPRI's ranking focuses on companies' arms sales which make up only 48 percent of Boeing's turnover and 70 percent of Lockheed Martin's revenues.

In BAE System's case, arms sales make up a far larger share of its sales with 95 percent of the total.

Born out of the merger of Marconi and British Aerospace in 1999, BAE Systems counts among its products the Eurofighter combat aircraft, the Bradley tank and the Astute submarine.

With 59 percent of BAE Systems' sales coming from the vast US arms market, the group has major production operations in the country as well as in Britain, Sweden, South Africa and Sweden.

"BAE really shows the increasing internationalisation of the arms industry and the attractiveness of the US market," SIPRI arms industry expert Susan Jackson said.

The group has benefitted from sales of mine-resistant, ambush-protected (MRAP) vehicles to the US government for the wars in Afghanistan and Iraq.

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