October 08, 2012
Credit: Credit: BAE Systems
Britain, France and Germany pushed on with talks on Monday aiming to prevent a disagreement over state shareholdings wrecking a proposed merger of EADS and BAE Systems.
Plans by Airbus parent EADS and UK arms firm BAE Systems to create the world’s largest aerospace and defense company must overcome a knot of political concerns over security and jobs.
Facing a 1600 GMT Wednesday deadline set by Britain, the goal is to make enough progress over the central issue dogging the talks to allow BAE Chief Executive Ian King and Tom Enders of Franco-German EADS to seek an extension.
BAE’s top investor questioned the very rationale of the $45 billion deal.
“If they can get the central issue of shareholding resolved, then there’ll probably be some more time to tie up other issues like headquarters, weights on the board and other matters,” said a senior diplomat following the talks.
“Otherwise, Enders and King have signaled they will pull the plug on the 10th (Wednesday).”
Officials failed to resolve incompatible demands over state involvement in a video conference on Friday. EADS and BAE denied German reports that the talks had collapsed.
British Defense Secretary Philip Hammond warned on Sunday that Britain would block the deal if key “red line” priorities were not met, including an ability to cap the influence the French and German governments would have on the new company.
He told the BBC on Monday he saw little chance of a deal being reached by Wednesday’s deadline.