Talks to merge aerospace group EADS and defense contractor BAE Systems are deadlocked, sources close to the talks said Oct. 5, with the governments of France, Germany and Britain at odds over the outcome. (AFP)
PARIS — Talks to merge aerospace group EADS and defense contractor BAE Systems are deadlocked, sources close to the talks said Oct. 5, with the governments of France, Germany and Britain at odds over the outcome.
According to the source, Germany intends to hold a 9-percent stake in the new company, the same as France, but Britain will accept only France’s shareholding with a guarantee that the French state will not later buy shares held by French conglomerate Lagardere.
Lagardere is widely understood to be looking to sell its 7.5-percent stake in EADS in the medium-term.
Responding to the report, an EADS spokesman said: “We have been informed by the governments about the status of the discussions but in no way have we been told that the deal is off.
“We continue to work towards the October 10 deadline we have been given the UK Takeover Panel,” the spokesman said.
EADS, the maker of Airbus jets, and defensce giant BAE Systems have until Oct. 10 to announce to British regulators whether a deal has been reached or more time is needed.
“We still have a few days. I don’t know how many more meetings these governments would need,” the industry source said after another round of talks between advisers to French President Francois Hollande, German Chancellor Angela Merkel and British Prime Minister David Cameron.
“We have three states showing us the Europe that doesn’t work as opposed to the Europe that works, EADS, and would work even better with BAE Systems,” the source said.
According to the source, the French have no intention of buying the 7.5 percent in EADS held by Lagardere but refuse to provide a written guarantee of this.
An EADS/BAE merger would create a $45-billion (35-billion-euro) group to rival U.S. giant Boeing.