The Obama administration’s emphasis on encouraging collaboration with U.S. allies and boosting competition could enhance the deal’s chances, he said, noting the Pentagon had already granted EADS permission to compete on its own in the 2010 aerial refueling competition ultimately won by Boeing Co (BA.N).

“BAE can’t get any bigger in the U.S. military until it has more financial resources, so putting these two companies together broadens the range of competitive options,” he said.

(Additional reporting by Soyoung Kim in New York; Editing by Matt Driskill)