A merger to create the biggest aerospace group in the world between EADS and BAE Systems collapsed on Wednesday, with analysts saying Ge...
A merger to create the biggest aerospace group in the world between EADS and BAE Systems collapsed on Wednesday, with analysts saying Germany shot it down from fear of being sidelined.
But analysts said Germany feared that if the deal to create a giant worth $45 billion (35 billion euros) went ahead, the power behind the civilian arm of the group would shift wholly to Toulouse in southern France where airliner maker Airbus is based.
And Berlin feared that the military operations would be run from London where BAE Systems is based.
The proposed transaction was announced four weeks ago and would have led to the creation of the world’s largest aerospace firm, with joint sales of around $100 billion far surpassing the current market leader, Boeing. The combined firm would have had a portfolio that would havebeen more balanced between its civil and defense business.
These proposals included far reaching job guarantees, and an important role for Germany as a site for part of the combined entity’s headquarters. Also, Germany would have been allowed to buy a stake of up to9% in the group.
By contrast, France and the U.K. appeared to have come closer to an agreement. Sources say that France would have been prepared to limit its ownership in the company, a key prerequisitefor the U.K. to approve of the deal.
