EADS keeps sights firmly on expansion in U.S. market

The collapse of merger talks between EADS and BAE Systems Plc was disappointing, but EADS remains "undeterred" in its drive to expand its footprint in the U.S. defense market, the chief executive of EADS' U.S. unit said.

Sean O'Keefe, chief executive of EADS North America, said a possible merger with BAE Systems was a "tremendous opportunity" that brought BAE and EADS closer together than ever, but the companies ultimately decided challenges with the respective governments involved in EADS could not be resolved.

"We knew going in that it was going to be an extremely difficult challenge," O'Keefe told Reuters in an interview shortly after the companies announced they would not seek an extension to continue their merger talks.

O'Keefe said the parties came "awfully close" to reaching agreement, and said he would not rule out a resurrection of the proposed deal at some future date, if issues raised by the involved governments could be addressed. "This was not a concern or any difficulty that arose between the two companies. We reached agreement. If anything, the relationship with BAE Systems corporate is stronger than ever."

He also underscored that EADS remains committed to its goal of expanding its presence in the U.S. defense markets. "The fact that this did not work its way to completion ... does not mean there will be any slowdown of any effort to look more broadly at other opportunities that may come along," he said.

(Reporting By Andrea Shalal-Esa; Editing by Gerald E. McCormick)