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EADS BAE it's over... :-( The fault of the governments, point out the industrialists

(BRUSSELS2) Sadness in the aeronautical world. BAE Systems and EADS have just officially announced that they have “decided to end their discussions ". Blame it on the governments - according to them..." Despite much constructive engagement (...) from the respective governments in recent weeks, it has become clear that the interests of the parties' government stakeholders cannot come close enough to each other (such as) with the objectives set by BAE Systems and EADS for (their) merger. »

The bug: the alignment of the interests of the shareholders (of the States)

For the manufacturers, however, the merger had a logic that they recall in a joint declaration which has just been published. " The merger was based on industrial logic and represented an opportunity to create a combination of two strong and successful companies greater than the sum of the parts.. Everything seemed to be off to a good start, at least between manufacturers. " BAE Systems and EADS had agreed to the main terms of the merger. business terms, legal structure, governance arrangements, unified management and advisory structure, new business strategy, short-term dividend policy, cost reduction and profit distribution. " From the outset of the discussions between the parties, BAE Systems and EADS had made it clear that they would proceed with a merger of their activities only if a transaction structure could be created that aligned the interests of the shareholders and with strong support from them. »

No world number 1, sniff! But it's not just a postponement

Each of the partners will now focus on delivering their respective strategies ". Despite the usual terms - aimed at reassuring shareholders and customers - the managers could not help but express their disappointment. " We are obviously disappointed that we have not been able to reach an acceptable agreement with our various government stakeholders. said Ian King, Managing Director of BAE Systems. " We believe the merger was a unique opportunity for BAE Systems and EADS to combine two companies.world-class companies with complementary businesses to create a world-leading aerospace, defense and security group. » And his sidekick Tom Enders, CEO of EADS, confirms: It's " Too bad we didn't make it but I'm glad we tried. I'm sure there will be other challenges that we will tackle together in the future. »

This news will delight some in the capitals. Enthusiasm was indeed not fanatical in Berlin, which did not want to leave the French and the British too much in a position of strength. And, in London, we were beginning to hear many voices, for example on the side of the parliamentarians of the Defense Committee of the House of Commons, who feared an erasure of British specificity and its link with the United States. In Paris, too, we remained very cautious, making sure to safeguard a right of inspection over the future giant, which would undoubtedly have been much less controllable than EADS (read: BAE – EADS: the positions are getting closer according to the French MinDéf). In short, fearing to see industrialists gaining complete autonomy, governments have safeguarded their sovereignty.

There remain the cooperation projects between the 2 companies, such as the Typhoon Eurofighter (credit: British Ministry of Defence)

Nicolas Gros Verheyde

Chief editor of the B2 site. Graduated in European law from the University of Paris I Pantheon Sorbonne and listener to the 65th session of the IHEDN (Institut des Hautes Etudes de la Défense Nationale. Journalist since 1989, founded B2 - Bruxelles2 in 2008. EU/NATO correspondent in Brussels for Sud-Ouest (previously West-France and France-Soir).