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European aerospace merger called off

Post by John Gillie / The News Tribune on Oct. 10, 2012 at 12:48 pm |
October 10, 2012 12:52 pm

A merger of two European aerospace companies that would have created a company to rival Boeing has been called off.

EADS N.V. and BAE Systems plc said today governments’ opposition doomed their combination.

The $45 billion merger would have needed approval of the governments of Britain, France and Germany. In recent weeks, it became clear that those approvals were unlikely.

“We are obviously disappointed that we were unable to reach an acceptable agreement with our various government stakeholders,” said Ian King, chief executive of BAE Systems.

“We believe the merger presented a unique opportunity for BAE Systems and EADS to combine two world class and complementary businesses to create a world leading
aerospace, defense and security group.

Tom Enders, EADS chief executive, thanked those who conducted merger discussions.

“It is, of course, a pity we didn’t succeed but I’m glad we tried. I’m sure there will be other challenges we’ll tackle together in the future. EADS will continue on its international growth path and our shareholders can continue to expect profitable growth, excellent liquidity and program execution based on a strong order book,” he said.

EADS is the parent company of Airbus, Boeing’s chief rival in the commercial aircraft business. BAE produces subassemblies for Airbus aircraft including wings. BAE has operations within the U.S. that EADS coveted as a way to secure more U.S. business.

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