Hammond could derail BAE-EADS merger
DEFENCE secretary Philip Hammond has threatened to block the proposed merger between BAE Systems and EADS, unless the French and German governments reduce their stakes in EADS.
The government could derail the merger by using its “golden share” in the business which allows it to block any change of control.
Speaking on BBC Radio 4 Mr Hammond said: “We have made very clear that we do have red lines around the BAE-EADS merger and that if they can’t be satisfied, then we will use our special share to veto the deal.
“It is not, I think, necessary to have no French or German government interest in the company. It is necessary to reduce that stake below the level at which it can control or direct the way the company acts.”
BAE shareholders are also said to be unhappy with the lack of detail on the deal.
BAE employs around 15,000 people in the North West at sites in Lancashire, Cumbria and Cheshire. EADS has around 6,000 staff at an Airbus wing factory near Chester.
The two firms announced merger talks on September 12 and have until 5pm on Wednesday to say whether they will pursue a deal or walk away.
