BAE Systems and EADS Say They Are in Merger Talks

The two biggest European aerospace and defense companies said they…

The two biggest European aerospace and defense companies said they were in discussions about a potential merger that would create an industry behemoth with a combined market value of nearly $50 billion.

EADS, which is the parent of Airbus, and BAE Systems are looking to join forces as their respective industries become increasingly competitive. While government contracts provide steady revenues, large European countries and the United States are pulling back on their military spending, weighing on the prospects of BAE Systems. Passenger airlines, the main customers of Airbus, have perked up lately, after some difficult periods.

“They are complementary businesses,” said Richard Aboulafia, an aerospace analyst at the Teal Group. “This is a way of achieving balance from the defense side.”

The two companies seem to be taking their cues from competitors.

Read more at The New York Times

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