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Super-merger jeopardized

October 1, 2012

A minority French stakeholder in EADS has questioned the current terms of a proposed merger between the European aeronautics company and Britain's BAE Systems. This and other queries may lead to failure of the project.

https://p.dw.com/p/16Hwp
A red board reading BAE Systems, with a ship as a backdrop
Image: picture-alliance/dpa

The French industrial and media group Lagardere, which has a 7.5 percent stake in the European Aeronautic Defense and Space Company (EADS), said on Monday it was unhappy about the terms of a planned EADS merger with Britain's arms manufacturer BAE Systems.

"We call on EADS to re-examine the project to better take into account the interests of French shareholders," Lagardere said in a statement.

Plans to bring together EADS and BAE were first announced in early September. The merger had been intended to form a 35-billion-euro ($45-billion) giant to rival Boeing in the US.

Tough negotiations ahead

So far, the players involved have not been able to find mutually acceptable merger terms because of a magnitude of commercial and national issues.

Germany's news magazine Der Spiegel claims in its latest edition that France and Germany had agreed to each seek a nine-percent stake in the merged giant.

The Financial Times Deutschland said Paris and Berlin wanted a blocking minority, but that would be something London would hardly accept.

According to British takeover rules, EADS and BAE have until October 10 to declare their intention to combine their operations or scrap the project altogether.

Current Franco-German parity in EADS comprises a 15 percent French government stake, alongside Lagardere's share, making 22.5 percent in all.

For Germany, the concern Daimler has a 15 percent holding. Another 7.5 percent stake is held by the public-private consortium Dedalus.

EADS is the maker of the widely-used Airbus passenger jet.

hg/ipj  (dpa, AFP)