EADS says continuing BAE merger talks with governments

Sat Oct 6, 2012 11:19am EDT
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By Gernot Heller

BERLIN (Reuters) - EADS EAD.PA is continuing "constructive talks" with governments over its proposed $45 billion merger deal with BAE Systems (BAES.L: Quote) and remains convinced that it is an excellent deal for Europe, a spokesman said on Saturday.

Tensions over the proposed supermerger spilled into the open on Friday, casting doubt on a rapidly approaching deadline as France, Britain and Germany jockeyed over the role of the state in the world's largest aerospace and arms group.

But EADS has been at pains to stress the merger proposal had not collapsed.

"We are continuing our constructive talks with the governments," the EADS spokesman said. "We remain convinced that we have made an excellent offer for Europe."

While both firms want a minimum government presence, mainly to protect BAE's defense interests in the United States, the deal has sparked a three-way political logjam.

France wants to keep a stake but will not rule out adding more, Germany wants to match France's role to avoid being left aside by Europe's other main powers, and Britain wants to cap state involvement, several people familiar with the talks said.

Time is running out before a UK stock market deadline of October 10 for a blueprint of the deal, which affects national security interests on both sides of the Atlantic.

A French government source has said the deadline could be extended by 28 days, something the companies are so far reluctant to do in the absence of concrete progress.   Continued...

Visitors look at aircraft models at the EADS booth during the ILA Berlin Air Show in Selchow near Schoenefeld south of Berlin, September 13, 2012. REUTERS/Tobias SchwarzBUSINESS)