UPDATE 1-France wants to keep influence over EADS -source

Wed Sep 26, 2012 12:34pm EDT

* France wants to keep EADS stake, government source says

* Berlin hasn't taken a decision either in favour or against

By Elizabeth Pineau

PARIS, Sept 26 (Reuters) - France wants to remain a shareholder in Airbus parent EADS and retain the ability to influence the aerospace group's decision-making in any merger with BAE Systems, a French government source said on Wednesday.

However, the source indicated flexibility on the way this was structured.

"France wants to remain in EADS' capital," the source said, speaking to Reuters on condition of anonymity. "We want to keep influence over the key decisions."

"We can imagine several possible formulas," the source added, referring to both shareholdings and board composition.

France owns 15 percent of EADS and would be left with a 9 percent stake in the merged company if EADS' current shareholders end up with 60 percent and BAE investors 40 percent, as has so far been mooted in the talks.

EADS and Britain's BAE Systems are in $45 billion merger talks, but face political uncertainty over the deal in France and Germany.

The French government source said a UK regulatory deadline of Oct. 10 appeared "short" given the issue's complexity, but that it was up to the companies to address this. Speculation is mounting that the companies could ask for an extension.

The German government, which does not have a stake in EADS but is considering buying shares currently held by German group Daimler, has raised questions about not only how but whether the merger should be pursued, according to a German lawmaker.

"There is a debate in Germany, you only have to read the newspapers," the French source said. "But no decision whether positive or negative has been taken to our knowledge."

EADS boss Tom Enders told German lawmakers in Berlin on Wednesday that any state role had to be limited for the combined company - set to be the world's largest aerospace and defence group - to be competitive.

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