Germany, France in 'Intensive' EADS-BAE Talks

Germany and France are in "intensive" talks with each other, along with European aerospace giant EADS and British defense company BAE Systems, regarding a possible merger of the two groups, Berlin said on Monday.

Germany and France are in "intensive" talks with each other, along with European aerospace giant EADS NV (IW 1000/59) and British defense company BAE Systems PLC (IW 1000/158), regarding a possible merger of the two groups, Berlin said on Monday.

Chancellor Angela Merkel's spokesman Steffen Seibert said the two governments are "examining every aspect of this proposal with all due care.

"They are speaking to each other and also with the companies," Seibert told a regular government news briefing.

He declined to provide details on the state of the discussions however, underscoring the sensitive nature of the talks.

"The topic of a possible merger between EADS and BAE is so sensitive that one should not discuss in public the details of what is being considered ... but only a complete result when the discussions have finished," said Seibert.

"There is joint consideration of this question and this is happening in an intensive fashion," he added.

The $45-billion deal, which should be finalized by Oct. 10 under British takeover law, also was a major topic in talks between Merkel and French President Francois Hollande over the weekend.

Merkel told reporters afterwards that "the discussions were good and in a spirit of friendship, but we do not need to discuss the details in public, particularly when it comes to jobs."

Hollande said the two governments will continue to "work closely together" and aim to meet the Oct. 10 deadline.

An EADS spokesman said on Monday: "It is our intention and current expectation that we will be able to provide further clarity by 10 October."

He added that "discussions regarding our possible combination are proceeding productively."

The two companies could ask the UK Takeover Panel for a delay if they are unable to meet the deadline.

German business daily Handelsblatt reported on Monday that the two firms were facing obstacles from the French government, which holds a substantial minority stake in EADS.

Berlin and Paris have taken a wait-and-see approach, with some officials arguing that the bigger company would be more competitive while others worry the merger could end up costing jobs.

The proposed tie-up announced by the two groups on Sept. 12 would change the landscape of the global aerospace industry, creating a major competitor to Boeing Co. (IW 1000/53).

Copyright Agence France-Presse, 2012

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