BAE, EADs in last minute negotiations to save deal

BAE Systems and EADS are engaged in a fight to keep their proposed €35-billion merger going with the UK, German and French governments wrangling over the deal before a crucial 5 pm deadline today.

According to UK defence secretary, Philip Hammond, the three powers – any of which could veto the deal – had outlined their positions on the merger after protracted talks, however negotiations are expected to go on till the last minute with a last-minute push to achieve consensus.

Speaking to Reuters on the sidelines of a Nato defence ministers' meeting in Brussels, Hammond said the companies now had a very clear understanding of the positions and the positions of the two governments.

Reuters also quoted a source with knowledge of talks between the UK, French and German governments as saying Berlin was being "particularly difficult".

BAE and EADS face a Wednesday deadline of 5 pm on whether to go for an extension from the Takeover Panel for their discussions, outline the terms of their deal or call off talks.

The agency quoted another source close to the negotiations as saying that an extension or failure were the most likely results. The source added, it was not likely that a deal would be announced, and it was either a case of stating that progress could not happen  or that there would be an extension.