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French Govt. Declares Support for EADS After BAE Deal Fails

Oct. 10, 2012 - 02:39PM   |  
By PIERRE TRAN   |   Comments
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PARIS — The French government supported EADS managers and backed their efforts to build the company, following news that the European company and BAE Systems have broken off talks for a mega-merger, the defense and economy ministers said Oct. 10 in a statement.

“France re-affirms its support for the EADS management and encourages it to pursue the company’s remarkable development,” Defense Minister Jean-Yves Le Drian and Economy Minister Pierre Moscovici said in a statement.

The French state, which owns 15 percent of EADS, closely examined the merger plan, particularly the implications for protection of its defense interests, industrial strategy and employment, the statement said.

BAE and EADS earlier announced they were stopping negotiations on a merger, as they had run into government resistance on the deal.

“It has become clear that the interests of the parties’ government stakeholders cannot be adequately reconciled with each other or with the objectives that BAE Systems and EADS established for the merger.”

Berlin proved to be the main obstacle to the 70 billion euro deal, though the exact reasons were unclear, Reuters reported.

Asked if he had encountered more problems with the German than the French government, BAE Chief Executive Ian King said, “That would be an accurate representation,” Reuters reported.

“We had clear red lines that we were not willing to go beyond relative to engagement and involvement of governments,” King told reporters in London, Reuters reported.

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