BAE Systems and EADS exploring merger potential
EADS and BAE Systems are looking into a merger.
EADS and BAE Systems have informed the London Stock Exchange that they are exploring the possibilities of a merger between the firms.
The companies confirmed they are in business negotiations regarding a tie-up, noting they have worked together on a number of important projects, including joint ventures relating to the Eurofighter and with MBDA.
If merger and acquisition advisors can make the combination work, the enterprises said it would create one of the world's largest defence, security and aerospace groups, featuring extensive technology and manufacturing centres in France, the UK, Spain, the US, India, Germany, Australia and Saudi Arabia.
Furthermore, the companies suggested that all stakeholders would achieve "significant benefits" if the merger took place.
The boards of directors of both EADS and BAE Systems would have to approve the terms of the tie-up through contract negotiations, while approvals from shareholders, regulators and governments would also have to be achieved.
"The immediate reaction among observers and media is that the combination will make a strong competitor to Boeing," Aerospace analyst Scott Hamilton noted.
Posted by Ron Maverick
Source: BAE Systems press release, September 12th