BAE-EADS merger cancelled amid political impasse

[FlintyV]

BBC - Aerospace and defence firms BAE Systems and EADS have decided to cancel their planned merger, after talks were thwarted by political deadlock.

It followed days of talks between the UK, French and German governments to overcome political objections.

The UK wanted its counterparts to agree to limit their influence in the merged firm in order to maintain BAE's strong working relations with the US Pentagon.

The BBC understands that Germany was fundamentally opposed to the deal.

"Once German intransigence became clear - as it did overnight - EADS and BAE had no option but to call the whole thing off," said the BBC's business editor, Robert Peston.

The move came ahead of a 17:00 BST regulatory deadline to close the deal.

"We are obviously disappointed that we were unable to reach an acceptable agreement with our various government stakeholders," said BAE chief executive Ian King.

Source - BBC - Guardian