French EADS shareholder unhappy with BAE merger terms

A minority shareholder of Europe's EADS on Monday said it was unhappy with the current terms of a proposed merger with Britain's BAE Systems to create an aerospace behemoth to rival US giant Boeing. Lagardere, the French industrial and media group "estimates that at this stage, the conditions of a merger between EADS and BAE are unsatisfactory," the company said in a statement. The group called on the European Aeronautic Defence and Space Company, in which it holds a 7.5 percent stake, "to re-examine the project of the EADS-BAE merger to better take into account the interests of EADS French shareholders." The planned merger between EADS and British arms manufacturer BAE Systems was first announced in early September and would create a $45-billion (35-billion-euro) aerospace behemoth to rival Boeing of the United States. But the players involved have not been able to agree to the terms of the merger because of a knot of commercial and national interests that straddles the Atlantic. At present, the majority of EADS's equity is controled directly or indirectly by France, Germany and Spain. BAE Systems meanwhile is important to British and US defence programmes. In the latest developments, Germany's Der Spiegel on Sunday reported that France and Germany have agreed to negotiate with the British government for each to obtain a nine-percent stake in the merged giant. The Financial Times Deutschland reported on Friday meanwhile that Paris and Berlin wanted a blocking minority -- an idea that Britain opposes. Under British takeover rules, the two companies have until October 10 to either formally announce that they intend to combine their activities or ditch the project. But a source close to the talks told AFP last week that it looked as though BAE and EADS would ask Britain's stock market regulator for a delay.