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FRANCE, GERMANY WARM TO EADS-BAE DEAL
FRANCE, GERMANY WARM TO EADS-BAE DEAL
01/10/2012
France and Germany have agreed to negotiate with the British government to obtain nine-percent stakes each in a merged EADS-BAE aerospace and defence giant and signalled readiness to give up
some of their current veto rights in favour of pre-emption rights for future sales of the shares.
The French government currently holds a 15-percent stake in the EADS, and French industrial and media group Lagardère has another 7.5 percent. The German government is not a direct shareholder but is ready to buy Daimler's 15-percent holding and the 7.5-percent stake held by the public-private consortium Dedalus to have equal shareholding with France.
The two governments, however, are still unhappy with the 60:40 merger split between EADS and BAE, saying the value is closer to 70:30, and French minor shareholder Lagardère called conditions for the planned merger "unsatisfying,” showing the talks are still a long way from reaching a deal.
The group headquarters is likely to stay in Toulouse, which was allegedly a deal-breaker for France, according to Financial Times. Germany is thought to get one of the merged company’s decision-making centres, while the U.K. wants the defence headquarters to be in London.
Analysts say there is little overlap between the two companies, which may help to prevent the business from large cuts and layoffs, easing the worries of the governments as the merged company would become one of the countries biggest manufacturing employers, with its workforce reaching 52,000 in Britain, 50,000 in France and Germany, and 40,000 in the U.S.
Under British law, EADS and BAE Systems now have less than 2 weeks to decide whether they want to pursue the merger, although both companies have called for an extension of the 10 October deadline.
The merger plan might pose a challenge for Italy's state-controlled Finmeccanica, Europe's third-biggest defence group.
The French government currently holds a 15-percent stake in the EADS, and French industrial and media group Lagardère has another 7.5 percent. The German government is not a direct shareholder but is ready to buy Daimler's 15-percent holding and the 7.5-percent stake held by the public-private consortium Dedalus to have equal shareholding with France.
The two governments, however, are still unhappy with the 60:40 merger split between EADS and BAE, saying the value is closer to 70:30, and French minor shareholder Lagardère called conditions for the planned merger "unsatisfying,” showing the talks are still a long way from reaching a deal.
The group headquarters is likely to stay in Toulouse, which was allegedly a deal-breaker for France, according to Financial Times. Germany is thought to get one of the merged company’s decision-making centres, while the U.K. wants the defence headquarters to be in London.
Analysts say there is little overlap between the two companies, which may help to prevent the business from large cuts and layoffs, easing the worries of the governments as the merged company would become one of the countries biggest manufacturing employers, with its workforce reaching 52,000 in Britain, 50,000 in France and Germany, and 40,000 in the U.S.
Under British law, EADS and BAE Systems now have less than 2 weeks to decide whether they want to pursue the merger, although both companies have called for an extension of the 10 October deadline.
The merger plan might pose a challenge for Italy's state-controlled Finmeccanica, Europe's third-biggest defence group.
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