10 Oct 2012

Crucial defence merger talks break down

Media sources are reporting that the much-discussed merger between BAE Systems and EADS has been abandoned.

Speculation had been rife that officials brokering the deal would seek an extension this afternoon (10 October), however it has been reported that no extension has been sought and the deal is effectively dead.

As DCI previously reported, it has been suggested that Germany were particularly opposed to the terms of the merger, and were unwilling to limit their influence in the new organisation as was proposed by the UK government.

In a statement issued by BAE Systems, the interests of the UK, France and Germany could not be reconciled with one another, adding: “BAE Systems and EADS have therefore decided it is in the best interests of their companies and shareholders to terminate the discussions and to continue to focus on delivering their respective strategies.”

Advocates of the merger will be sorely disappointed by this afternoon’s result, with many believing that the deal would have resulted in a much stronger European defence industry. As a result of today’s announcement, the largest defence organisations will remain in the US with Boeing and Lockheed.

Follow the @DCITenders Twitter feed for reactions to the news and updates as we receive them.