It's reported the BAE Systems and EADS have begun talks about a merger

Uh oh.

The new company would be more like Boeing, combining aircraft and military aerospace,

Uh oh.

:huh:

It's reported the BAE Systems and EADS have begun talks about a merger

I think bae should stay as bae, its one of the greatest companys Britains ever had. What other aircraft has such sophistication as the typhoon?! However if it allows them to reopen woodford I would change my mind

I think bae should stay as bae, its one of the greatest companys Britains ever had. What other aircraft has such sophistication as the typhoon?! However if it allows them to reopen woodford I would change my mind

 

The Typhoon was developed by a consortium that includes EADS and BAE Systems amongst others.

 

BAE Systems has already sold Woodford

First of all, it would be very very big and I can already see the European countries fighting over their influence in that mega company. On the 'big' part, the regulation authorities may have to say a word or two.

The BAe of today is an amalgam of many famous UK companies; Vosper Thornycroft, Yarrows Shipbuilding, Ferranti, Vickers, and the list is almost endless. As someone who dealt with all those companies, plus the modern BAe and EADS, I would be very cautious about this "merger". I witnessed the evolution of, and split up of Phillips A.B., Phillips Signaal Aperratum (sp?), Celsius Tech, SAAB, Thompson, Sperry, ad nauseam... they were not pretty sights nor are any a pleasant memory. If this "merger" goes as the cooperative efforts on the NATO Frigate of the 90's went (where the UK, the Netherlands, and Spain pulled out of an agreement with the French and Germans), it will be a disaster. I would also argue that it will not achieve any more competitiveness against Boeing... The inefficiencies in management overhead will be jaw dropping.

The inefficiencies in management overhead will be jaw dropping.

And it's not like EADS currently has a lack in that department. ^_^

And it's not like EADS currently has a lack in that department. ^_^

 

Nor BAe for that matter. :p0129:

This merger, if approved, will (would) achieve at once several objectives that have become a top priority for EADS management, especially since Tom Enders became President earlier this year.

 

But many important share holders (such as the German and French Governments, or industial groups such as the French Lagardère Group for example) may feel leery about it and resist it. Other regulating authorities (including in the US and the EU will also have a word to say so the battle is far from won at this time.

 

The market reaction (stock exchange) has not been overly enthusiastic either (to say the least) but this may be more a lack of confidence in the chances that the operation will succeed than in the soundness of the operation itself. And the fact that the announcement was made so early (too early?) - probably due to a leak - is a good indication of what is going on behind the scene.

 

Among the main results a merger would achieve :

 

- Balancing military and civiian business. EADS has been struggling to develop their defense business (today 70% of EADS business is Airbus, the rest is made of Cassidian (Defense), Eurocopter and Astrium (Space) The new, merged EADS/BAE would be better armed against wordwide competition (and Boeing) and would in fact be almost 50 % larger than Boeing (72 vs 49 billion €). The new group business would be much more balanced : 53% civilian, 47 % military

 

- developping business in the US (currently 45% of BAE's business is in the US)

 

- the French and German Governments would be almost entirely removed from the corporate decision taking process, keeping only a kind of "golden share" to protect agains an hostile takeover.

 

One can only say that Tom Enders has been incredibly proactive and bold since taking charge (Airbus decision to manufacture in Mobile Alabama, relocating of company HQ in Toulouse, France, restructuring of defense branch).

 

As we say in French "he forgot to be dumb". Let's see what will happen next...

 

Bruno

 

PS to previous posters : Mergers and acquisitions - especially in large corporations - are NOT pleasure cruises (and, as we say in French "you don't make an omelette without breaking eggs"). Remember Boeing and MDD? Managers know that a lot of energy and wealth will be lost, but they know that, if they don't screw up, in the long term the benefits far outweight the drawbacks.

its one of the greatest companys Britains ever had

 

As an engineering officer on big grey ships, some of which have been designed and built by BAE Systems I have to say they're not all that. Not by a long shot.

 

Let's also not forget the utter shambles that UK defence procurement has been for decades now - much of the blame for which is down to the questionable relationship between the government and BAE.