Brussels, 11/10/2012 (Agence Europe) - The planned merger between EADS and BAE Systems for arms and aerospace, officially announced on 12 September (see EUROPE 10689), fell through on 10 October, the deadline given by the London Stock Exchange for its official notification, due largely to opposition from the German government, which feared the merger would be too expensive financially and socially and would lead to less German influence.
Berlin feared that the merger would lead to job losses and reduced capability at EADS plants in Germany in the run-up to general elections next year. A further concern was fear that the nerve centre of the defence arm of the merger (to be entitled EADS-BAE) would be moved out of Germany to the United Kingdom now that the EADS management has decided to transfer the company's headquarters for plants in Paris and Bavaria to Toulouse. The German government is also unhappy about the cost (€6 billion) of buying up the German state's share in Daimler (part of EADS' capital), which would be required to ensure Germany had an equal share of the merged entity's capital with France).
A European Commission spokesperson said on 11 October that the Commission had no comment to make about the failed merger plans, adding, however, that it was a serious setback in the formation of a European defence industry and making the best use of European defence industry potential, two priority aims for the EU. (FG/transl.fl)