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BAE merger bid hits more turbulence
A POTENTIAL multi-billion-pound merger between defence giant BAE Systems and Airbus aircraft manufacturer EADS has come under further pressure after a major shareholder demanded a better deal.
French media tycoon Arnaud Lagardere, who is European Aeronautic Defence and Space chairman and whose company Lagardere owns a 7.5 per cent stake, wants better terms for French controlling shareholders.
The obstacle comes after BAE chief executive Ian King issued a plea for political support for the proposed merger and said it would create a global company that would be more than the sum of its parts.
The company employs around 4,000 people at its Samlesbury base.
Chorley MP Lindsay Hoyle said: “The French are brilliant at getting a good deal for the French and we have to push for an equally good deal. We have to do what’s right by the people who are working there and by Lancashire.”
German automotive company Daimler, which owns a 22.5 per cent stake in EADS, is also thought to share many of Lagardere's concerns.
Lagardere urged EADS management to complete "without delay, the indispensable re-examination of the project to combine EADS and BAE, to better take into account the interest of all the French controlling shareholders of EADS".
EADS chief executive Tom Enders is understood to have held talks with the billionaire in a bid to salvage the deal, which would create the world's biggest aerospace company with a market value of around £31 billion.
The deal will require the approval of the British, French and German governments if it is to go ahead, while the United States is understood to be taking a close interest in the deal because of BAE's involvement in sensitive US defence projects.
UK unions fear that the move will trigger thousands of job cuts, while the British government is expected to block the deal if it saw the French and German governments take stake above nine per cent in the new combined entity.