LONDON -- Baroness Thatcher will be remembered for many reforms, but one of enduring legacy for investors is that she gave us the stock market we know today.

Privatization became a key plank of economic policy, and nine of the firms in the FTSE 100 are the direct descendants of state-owned companies privatized during her time as prime minister.

Thirty five years ago, the precursors to BP (BP 0.96%)BAE (LSE: BA)International Consolidated Airlines (IAG 1.71%)BT (BT.A 0.14%)Rolls-Royce (RR 0.62%)BGCentrica, Severn Trent and United Utilities were all state-owned enterprises. Today. they are successful blue-chip firms with a combined market capitalization of over £200 billion.

1. BP
Privatization had started in 1977 when the Labor government of James Callaghan sold a 32% stake as part of the conditions of the country's IMF bailout. Under Margaret Thatcher's watch the remaining stake was sold, with two big sales in 1979 and 1987. The 1987 offering coincided with a stock market crash and the stock was left with underwriters, costing them billions.

BP subsequently grew to become the FTSE's biggest dividend payer, but the U.S. Deepwater Horizon disaster put paid to that. With a new alliance with Russia's state-owned oil company, it's set to resume its former upwards trajectory.

2. BAE
British Aerospace (BAE) was sold off in two chunks in 1981 and 1985. BAE struggled in the 1990s and merged in 1999 with Marconi to become BAE Systems. BAE sold its 20% of Airbus to EADS in 2006 to concentrate on defense, only for new management to seek a merger with EADs in 2012 to regain exposure to commercial aerospace.

Poor strategic management may have been a counterweight to superb engineering, but a 5% yield in a -- literally -- defensive sector makes the company an attractive investment.

3. BT
Half of British Telecom was privatized under Margaret Thatcher in 1984, with the remaining shares sold off in 1991 and 1993. It was the first of the blockbuster utility privatizations, with the company at the time enjoying a virtual monopoly (a consortium, Mercury Communications, provided nominal competition).

Shareholders have had a roller-coaster time, with the changing structure of the industry and the technology bubble. More recently, a push into broadband has given the company a new lease of life.

4. IAG
British Airways was fully privatized in 1987, in an offer that was 11-times oversubscribed. It grew in scale with the acquisition of British Caledonian, and then in profit under CEO Willie Walsh, who did some union-wrestling of his own.

IAG was formed from the merger of British Airways and Iberia in 2010, to enjoy greater global scale. However, management is now hampered by Spanish union intransigence.

5. Rolls-Royce
Rolls-Royce is an oddity in the privatization program. It had been nationalized by Lady Thatcher's predecessor Edward Heath in 1971 to save it from administration after cost over-runs on the RB211 engine. The Thatcher government returned it to the private sector in 1987, since when it has prospered to be one of three global manufacturers of big engines.

In a companion piece, I'll cover the four utility stocks.

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