European aviation and defence equipment majors EADS and BAE Systems have abandoned their merger talks and blamed it on the French, British and German governments for failing to reconcile differences with one another.
EADS and BAE Systems blamed the three countries, particularly Germany, for wrecking the $45 billion merger deal.
BAE Systems and EADS said the merger proposal was based on sound industrial logic and would have given a unique opportunity to create a technology leader and a greater force for competition and growth across both the commercial aerospace and defence sectors and which would have delivered tangible benefits to all stakeholders.
''Discussions with the relevant governments had not reached a point where both companies could fully disclose the benefits and detailed business case for this merger,'' the two companies said in a joint release.
''BAE Systems and EADS are, however, confident that these would have provided a strong case to take to their shareholders,'' the release added
BAE Systems and EADS had agreed the principal terms of the merger, subject to the approval of their respective boards, including, the commercial terms of the merger, legal structure of the merger, governance arrangements which would enable the combined business to operate in a normal commercial manner, a unified management and board structure, strategy for the combined business as well as near-term dividend policy, including cost saving and revenue benefits of the combination and associated implementation plan.