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Germany thinks more time needed for EADS/BAE talks
September 27, 2012 / 6:24 AM / 5 years ago

Germany thinks more time needed for EADS/BAE talks

NICOSIA (Reuters) - German Defense Minister Thomas de Maiziere said on Thursday he believed more time would be needed beyond an October 10 deadline to discuss a proposed merger between EADS EAD.PA and BAE Systems (BAES.L) to create an aerospace and Defense giant.

A BAE Systems sign is seen outside the company's Warton site near Preston, northern England, in this file picture taken October 1, 2009. REUTERS/Phil Noble/Files

“Perhaps we need more time. It depends on the answers for our questions and so I think we need more time,” de Maiziere told reporters in Nicosia, when asked if he was optimistic the October 10 deadline could be met.

Barring an extension, Franco-German dominated EADS and Britain’s BAE have until October 10 under British takeover rules to set out detailed plans for the $45 billion merger, which is complicated by the interests of the governments involved.

A French government source also cast doubt on whether the deadline would be met, saying it appeared tight “given the complexity of the issues on the table.”

“But that’s a matter for the companies,” added the source, speaking late on Wednesday on condition of anonymity.

De Maiziere said he had discussed the proposed merger with his French and British counterparts on Wednesday evening, on the sidelines of a European Union Defense ministers’ meeting that all three are attending in Cyprus.

Describing the discussions as “constructive”, he said: “This is a complex situation, there are a lot of questions and conditions, nothing has (been) decided yet.”

“We will keep in contact,” he said.

“There are constructive discussions of course among France, Germany and the UK. We are friends, so we will see. There is no result and the situation is open,” he said.

Visitors look at aircraft models at the EADS booth during the ILA Berlin Air Show in Selchow near Schoenefeld south of Berlin, September 13, 2012. REUTERS/Tobias Schwarz

MERGER WEIGHTING

Asked if he was happy with the proposed 60-40 merger weighting between EADS and BAE, de Maiziere said this was not an issue for him. “This is not on my table,” he said.

A German economy ministry document, obtained by Reuters on Monday, showed Germany had deep reservations about the planned merger, including doubts about whether the combined group would be safe from takeovers and could guarantee jobs.

Slideshow (2 Images)

The paper said the 60-40 ratio “does not correctly reflect the actual value which is closer to 70 to 30.”

With government approval imperative, EADS boss Tom Enders took the case for the planned merger to German lawmakers on Wednesday, making clear his belief in reducing state influence in the company.

EADS EAD.PA has factories across Germany, France, Spain and Britain, and the deal, which would dilute their influence, has sparked government concerns.

EADS and BAE have said they will offer the governments of France, Germany and Britain a “golden share” in the new company, allowing them to block any future hostile takeover.

Separately, the head of Mercedes-manufacturer Daimler AG (DAIGn.DE), which holds a 15 percent stake in EADS, declined to give a view on EADS’ future, saying it wanted to focus on its auto business.

“It is not our key responsibility to determine the future strategy of the aerospace industry,” Chief Executive Dieter Zetsche said at the Paris Auto Show.

Additional reporting by Michele Kambas in Nicosia, Elizabeth Pineau and Christiaan Hetzner in Paris; Editing by Sophie Walker

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