Britain hopes for talks with French, Germans on EADS/BAE

British Defense Secretary Philip Hammond said on Tuesday he hoped to meet his French, German and U.S. counterparts to discuss the proposed merger of aerospace groups EADS and BAE Systems, a day before the deal's deadline.

The plan to create a European Defense and aerospace giant out of the two companies rest on a knife edge because of disagreements between the governments involved and criticism from private investors.

A deadline set by London's stock market comes up on Wednesday.

"We always knew that there was a crunch point this Wednesday and the company has to decide today whether it's going to ask the stock exchange for an extension of time or not," Hammond told reporters as he arrived for a meeting of NATO Defense ministers in Brussels.

"I'm hoping to meet my German, French and indeed my American counterparts during the course of this meeting to talk about this subject," he said.

German Defense Minister Thomas de Maiziere appeared to signal there was no movement in the talks when he was asked about the merger on arrival at the two-day NATO meeting.

"This topic is not on our agenda and in my opinion there is nothing new to add on the negotiations" at NATO, he said.

French Defense Minister Jean-Yves le Drian plans a bilateral meeting with U.S. Defense Secretary Leon Panetta in Brussels later on Tuesday, according to diplomatic sources, but it was unknown if the merger plan would be on the agenda.

NATO Secretary-General Anders Fogh Rasmussen declined comment on the planned merger but threw his support in general behind a restructuring of Europe's Defense industries.

"I consider such a merger a commercial decision and it's for shareholders and involved governments to figure that out. It's their decision," he told reporters.

"But let me stress that in general I'm in favor of restructuring European Defense industries with a view to making them more competitive and more effective," he said.

A disagreement over whether Paris could increase its shareholding in a combined BAE-EADS in future is the latest obstacle to the merger. Berlin's desire for a more favorable deal is another possible hitch.

Hammond has said he opposes France, which owns 15 percent of EADS, lifting its stake in the merged group beyond a diluted level of 9 percent.

(Reporting by Adrian Croft, Claire Davenport. Editing by Sebastian Moffett.)