BAE SYSTEMS PLC 
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In an e-mailed statement, the Serious Fraud Office (SFO) said it had arrested two men, while a separate source familiar with the matter said the arrests were connected to the investigation into Rolls Royce.
"In connection with a Serious Fraud Office investigation, we can confirm a number of search warrants have been executed at various properties in London today. Two men were also arrested." the agency said.
It also said officers from the National Crime Agency and City of London Police assisted with the operation.
Rolls Royce, which is due to publish its full-year results on Thursday, declined to comment.
The world's second-largest maker of aircraft engines said in December the SFO had launched a formal investigation into concerns of possible bribery and corruption in China and Indonesia.
It had said a year earlier that it had passed information to the SFO relating to bribery and corruption involving intermediaries in overseas markets. It said then that it could face prosecution.
Allegations of corruption are not new to the defence industry, where companies tends to use individuals or companies to help broker deals in countries where they do not have a large presence.
Europe's largest defence contractor BAE Systems was fined $450 million by the United States and Britain in 2010 following long-running corruption investigations at home and abroad into defence deals in Saudi Arabia, Tanzania, Sweden, the Czech Republic and Hungary.
(Reporting by Brenda Goh; Editing by Julien Toyer and Mark Potter)
