BAE Systems merger talks collapse (From Lancashire Telegraph)

BAE Systems merger talks collapse

1:43pm Wednesday 10th October 2012 in News By Peter Magill, Chief reporter

A CLASH of competing government interests has been blamed after the collapse of merger talks between BAE Systems and French contractor EADS.

Bosses at the two defence companies have insisted they were closing to sealing a £28billion partnership, which would affect staff at BAE’s sprawling plants at Samlesbury and Warton.

But BAE officials maintain that government shareholders in the respective operations could not reach a resolution, forcing them to scupper the planned alliance.

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

“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, defence and security group.”

And EADS boss Tom Enders added: “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.”

Shareholders had already professed to being ‘left in the dark’ regarding the deal and one of BAE’s principal investors, Invesco, had expressed reservations earlier this week about what impact the move would have on the firm’s US dealings.

The commercial and legal terms of ther merger had apparently been agreed in principle, and potential cost savings identified. But the blame has been placed at the inability of Downing Street and Paris to ‘reconcile’ their own defence requirements.

For more details and reaction to the development, read tomorrow’s Lancashire Telegraph.