September 27, 2012
Credit: Credit: BAE
Europe’s EADS (EAD.PA) rejected calls on Thursday to allow extra time for negotiations over a $45 billion merger with BAE Systems (BAES.L), as brinkmanship looked set to play a key role in politically complex plans to create a new defense giant.
Fabrice Bregier, head of the Airbus planemaker unit and part of the inner circle running Franco-German-Spanish EADS, was quoted as saying it was crucial to stick to the date set by UK regulators under rules designed to protect investors.
“The importance is that opinions converge. The October 10 deadline may seem soon but it is absolutely necessary given the environment,” Bregier told the French daily Les Echos in an interview to be published on Friday.
EADS (EAD.PA) and BAE are in talks to create what would be the world’s largest defense company. But their efforts have become snagged on differences over control between France and Germany while there are also political concerns about jobs.
German Defence Minister Thomas de Maiziere joined France in pressing the companies to seek an extension of the UK deadline in order to give politicians more room to bridge differences.
“Perhaps we need more time. It depends on the answers for our questions and so I think we need more time,” de Maiziere told reporters at a meeting in Cyprus.
France and Germany want to safeguard their influence over EADS while special arrangements will be needed to ringfence sensitive operations, including work BAE does in the United States and on Britain’s nuclear submarines.
In the past two weeks, investors uncertain about the deal have stripped 4 billion euros from the value of EADS, illustrating the risk Chief Executive Tom Enders could face if he agrees to expose the stock to a further month of negotiation.