by Christopher Freeburn | October 10, 2012 11:23 am
The proposed merger between European aerospace consortium EADS (PINK:EADSF) and the United Kingdom’s BAE Systems (PINK:BAESY) has been called off.
Last month, the two companies announced that they were in merger talks. The combined company would have had annual revenue of $90 billion and employed 220,000 workers. However, any agreement faced significant regulatory hurdles in Europe, the U.S. and Asia, the Associated Press noted.
In the end, those hurdles proved too high. On Wednesday EADS and BAE Systems said they were ending negotiations over the deal due to clashing interests between their major stakeholders, which include a number of European governments.
Merging the two companies would have created a European rival to America’s Boeing (NYSE:BA). EADS competes directly with Boeing in the commercial aircraft market through its Airbus subsidiary.
The French, British and German governments each had requirements and conditions for any deal. Potential job losses were a major issue, especially considering Europe’s current economic woes.
Britain also feared a loss of business in the U.S. in response to a move so clearly meant to counter Boeing.
Shares of EADS rose about 3%, while BAE shares slipped fractionally in over-the-counter trading in New York on Wednesday morning; Boeing shares were flat.
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