Published October 10, 2012
LONDON – Talks on a $45 billion merger of EADS and BAE Systems collapsed on Wednesday when the governments of France, Germany and Britain failed to reach agreement over a deal to create the world's largest aerospace and arms group.
Following is a summary of market reaction.
RICHARD HUNTER, HEAD OF EQUITIES AT HARGREAVES LANSDOWN STOCKBROKERS
"One of the surprises is probably that the general feeling was that they were at least looking to increase today's deadline.
"It was clearly a question of shareholder and political issues and they were insurmountable given the time that we had ��� EADS were going to have the slightly larger representation in the new company so what they haven't got now is that distraction to the business that they would otherwise have.
"The market perceived that BAE would get a better part of the deal. It was also mooted that should the deal go ahead it might lead to further consolidation in the sector, which now looks less likely."
IAN WADDELL, UNITE NATIONAL OFFICER FOR AEROSPACE AND SHIPBUILDING, SAID:
"The highly skilled workforces of both companies are the beating heart of British manufacturing. A merger, with a jobs guarantee, would have created a strong new company that could have protected the UK's long term interests.
"There was an industrial logic to the merger, but national and political interests proved to be the stumbling block. The UK government now needs to strengthen its ���golden share' and send a powerful message that it backs British manufacturing and BAE systems."
(Reporting by UK newsroom)