Merger talks between London–based BAE Systems plc, which has a location in Johnson City, and European Aeronautic Defence & Space Co. (EADS) have ended as the governing bodies of the two parties couldn’t come to terms on how to structure a merged company.
The companies first announced news of a possible combination of the businesses in September.
According to a release on BAE’s website, the two companies believed the merger was based on sound industrial logic and presented an opportunity to create a combined company that was stronger than the two individual firms. Discussions between the two companies had not yet reached a point where both sides could fully disclose the benefits and detailed business case for a merger.
Ultimately, the two companies could not come to terms on details of the merger including a strategy for the combined business, governance arrangements, board structure, and more, according to the release. The firms announced today they had discontinued talks.
“We are obviously disappointed that we were unable to reach an acceptable agreement with our various government stakeholders,” BAE Chief Executive Ian King said in the release. “We believe the merger presented a unique opportunity for BAE Systems and EADS to combine two world-class and complementary businesses to create a world-leading aerospace, [defense], and security group.”
BAE’s business remains strong and robust, King said.
“We continue to see opportunities across our platforms and services offerings and in the various international markets in which we operate,” he said. “We remain committed to delivering total shareholder value and look to the future with confidence.”
EADS Chief Executive Tom Enders thanked those who worked on the merger talks.
“It is, of course, a pity that we didn’t succeed, but I’m glad we tried,” he said. “I’m sure there will be other challenges we’ll tackle together in the future. EADS will continue on its international growth path and our shareholders can continue to expect profitable growth, excellent liquidity, and [program] execution based on a strong order book.”
Contact DeLore at tdelore@tgbbj.com