Defense firms quit blockbuster merger talks
LOS ANGELES — One month after announcing they were in blockbuster merger talks, Airbus parent European Aeronautic Defense & Space Co. and BAE Systems PLC decided to terminate their discussions as a result of a political impasse.
The combination of the two European aerospace/defense giants would have established the largest such company in the world.
Together, British-owned BAE and EADS, owned in part by the French, German and Spanish governments, would have annual sales totaling more than $94 billion, dwarfing industry leader Boeing Co.'s $68.7 billion.
But in a joint statement, the companies said: “It has become clear that the interests of the parties' government stakeholders cannot be adequately reconciled with each other or with the objectives that BAE Systems and EADS established for the merger.”
The potential merger would have had broad effects across the defense industry, particularly for larger contractors such as Lockheed Martin Corp., Northrop Grumman Corp. and Boeing.
BAE and EADS have divisions in the United States and frequently compete for defense work here. Both firms have suppliers and facilities in Southern California.
Analysts had said that the deal made the most sense on the defense side of business, now that global defense revenues are on the decline.
EADS and BAE have a history of collaboration and work together as partners on a number of projects, including MBDA, a European company that develops and manufactures missiles, and the Eurofighter Typhoon, a modern combat aircraft used by various European militaries.
“We are obviously disappointed that we were unable to reach an acceptable agreement with our various government stakeholders,” Ian King, chief executive of BAE Systems, said in a statement. “We believe the merger presented a unique opportunity.”
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Penguins’ Letang leaves hospital, ‘day-to-day’ with concussion
- NFL coaches weigh in on Polamalu’s legacy
- Starkey: Next frontier for Steelers offense
- Shortfalls sabotage promise of union retirees’ pensions
- Pirates pitchers finding success with expanded strike zone
- South Side house part of former Steeler’s end game
- Alvarez latest in Pirates’ revolving door at first base
- Pirates notebook: Polanco’s power outburst a matter of timing
- From sticks to pucks, Mt. Pleasant collector wields power of the Pens
- GOP succeeding at down-ballot level
- Mt. Lebanon native, Iraq war hero’s action goes unrewarded