September 25, 2012
Credit: Credit: Eurofighter
Airbus parent EADS and Britain’s BAE Systems are considering sweetening their proposed merger deal for EADS shareholders, after resistance from France and Germany, sources familiar with the transaction said.
EADS and BAE are discussing valuing EADS at more than the 60 percent of the combined company that has so far been suggested, the sources said.
“The ratio could be changed up to 3 percentage points in favour of EADS,” an EADS advisor said, while another source said a change of up to 3-5 percentage points in favour of EADS was possible. This would push the ratio to 63:37 or 65:35.
However, BAE is unwilling to see any changes and one source close to BAE said the two companies were not discussing a change to the ratio.
EADS was not immediately available for comment. BAE Systems declined to comment.
The tie-up would create the world’s largest integrated defence and aerospace company with annual sales of $93 billion, but is fraught with national economic and security concerns.
Some investors have previously said the proposed ratio is weighted too heavily in favour of BAE, which is heavily exposed to shrinking national defence budgets.
The German government on Monday set out a list of reservations about the deal in a government paper, saying a 70:30 ratio would be a more accurate valuation.