By Gernot Heller
BERLIN Oct 6 EADS is continuing
"constructive talks" with governments over its proposed $45
billion merger deal with BAE Systems and remains
convinced that it is an excellent deal for Europe, a spokesman
said on Saturday.
Tensions over the proposed supermerger spilled into the open
on Friday, casting doubt on a rapidly approaching deadline as
France, Britain and Germany jockeyed over the role of the state
in the world's largest aerospace and arms group.
But EADS has been at pains to stress the merger proposal had
"We are continuing our constructive talks with the
governments," the EADS spokesman said. "We remain convinced that
we have made an excellent offer for Europe."
While both firms want a minimum government presence, mainly
to protect BAE's defence interests in the United States, the
deal has sparked a three-way political logjam.
France wants to keep a stake but will not rule out adding
more, Germany wants to match France's role to avoid being left
aside by Europe's other main powers, and Britain wants to cap
state involvement, several people familiar with the talks said.
Time is running out before a UK stock market deadline of
Oct. 10 for a blueprint of the deal, which affects national
security interests on both sides of the Atlantic.
A French government source has said the deadline could be
extended by 28 days, something the companies are so far
reluctant to do in the absence of concrete progress.
Senior aides to the leaders of all three countries held a
video conference on Friday and "put everything on the table to
see if we can go forward", the source added.
EADS and BAE denied a German report that this had resulted
in deadlock and that the merger proposal had collapsed.
A French parliamentary source said last week that Hollande
was ready to contact Merkel on the issue but there were no
immediate signs of any planned contact.
In a sign of the sensitivities surrounding the deal in
Britain, 45 lawmakers from the ruling Conservative Party sent a
letter to Prime Minister David Cameron on Friday to say they
would only back the merger if France, Spain and Germany got rid
of their stakes in the new company.
"Such is the importance of the proposed EADS/BAE merger to
the UK that it should be a condition of the merger being
approved by HM Government that the state owned shareholdings are
fully divested," said the letter, seen by Reuters.
The members of parliament said they would also need to see
clear safeguards provided to protect British manufacturing and
jobs before the government gives the green light to the deal.
"Without such changes it seems it is EADS and its government
shareholders who have everything to gain while the British armed
forces, UK manufacturing and BAE have everything to lose," the