German gov't lists reservations on EADS/BAE merger

BERLIN, Sept 24 Mon Sep 24, 2012 7:59am EDT

BERLIN, Sept 24 (Reuters) - France and Germany agree that a plan to merge EADS and BAE Systems provides no complete guarantee against takeovers, according to a German economy ministry paper obtained by Reuters on Monday.

"A common position with France is being sought," said the paper, which sets out German reservations about the merger plan for a German parliamentary committee.

The paper said guarantees provided under the proposed merger on future location of factories were not reliable, underscoring fears about possible job losses if the plan goes ahead.

The merger plan says that states are to have no consultation rights in operational decisions taken by the merged company, the German document said.

The ministry sees the relative value ratio of European aerospace group EADS and British contractor BAE Systems as "closer to" 70:30 rather than the 60:40 ratio seen by the companies, the paper said.

The two companies announced earlier this month they were in advanced talks over a mega-merger to create an industrial giant, in what would be the biggest shake-up in Europe's aerospace and defence sector in more than a decade.

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