EADS-BAE chiefs defend controversial merger

The chief executives of Europe's two top aerospace and defence companies, EADS and BAE, defended in a joint newspaper article Monday their controversial plan to merge the two companies, according to dpa. The governments of both Germany and France, both main shareholders of Airbus-maker EADS, have voiced concern that such a deal might dilute their influence. The Lagardere media group, which owns 7.5 per cent of EADS, has also criticized the merger terms as 'unsatisfactory,' calling on EADS management to re-examine the project 'without delay' to 'better take into account' Lagardere's interests. Britain's BAE chief, Ian King, and EADS chief Tom Enders have sought in their article to counter what they call 'myths and misconceptions,' writing: 'This is a combination borne out of opportunity, not necessity.' Their opinions were published by the Financial Times of Britain, the Sueddeutsche Zeitung of Germany and Le Monde of France. 'With the necessary political will and support, management determination and proper governance, BAE Systems and EADS can produce a whole that is greater than the sum of its parts,' they wrote. Analysts say a merger would produce a company worth 75 billion euros (97 billion dollars) in annual sales and with more than 220,000 employees, making it as big as top US aerospace and defence company Boeing. 'We propose to replace the shareholder arrangements which currently give Daimler, Lagardere and the French state joint control over EADS,' the two chiefs wrote. Those stakes give Germany and France 22 per cent of EADS each, either directly or via Daimler, a bank and Lagardere as proxies. British-based BAE Systems is held by commercial investors, with no government involvement.