France and Germany are not on the same page over the headquarters for a new aerospace giant to be formed from a planned merger of Europe's EADS and Britain's BAE Systems, Reuters quoted sources familiar with the matter as saying yesterday.
While France wants the headquarters of the group to be based in Toulouse, its southwestern aerospace capital where the Airbus, the aircraft maker and subsidiary of EADS is based, Germany is pushing for the group to be headquartered outside Munich.
The demands would need to be reconciled through tough negotiations now under way following a public spat over the creation of a new global defence group on Monday.
There have been clashes a plenty over over the 60:40 merger ratio in favour of EADS between shareholders, executives and politicians and now a barely concealed battle had been joined over the headquarters as talks are expected to go on to the last minute of the 10 October deadline.
UK arms firm BAE Systems and EADS, controlled by public and private interests in France and Germany with Spain as a junior partner, are working on creating Europe's answer to US aerospace giant Boeing with a value of $45 billion.
The battle over the location of the company's headquarters has emerged as a sensitive issue of national pride as Germany fights to retain its standing in one of its flagship projects.