Political deadlock forces BAE/EADS merger to be abandoned

<p>The BAE/EADS merger has failed due to UK, French and German political disagreement.</p>

Political deadlock between the UK, French and German governments has led to the merger between EADS and BAE Systems being abandoned, due to the fact an agreement over the inner workings of the deal was never reached.

It had been hoped that by joining the European defence and aerospace organisations, it would create a super company to rival Boeing in the US.

The move to let the merger fall by the wayside came ahead of the deadline to apply for an extension when the London Stock Exchange (LSE) closed yesterday (October 10th).

The UK wanted its counterparts in France and Germany to limit their influence in the amalgamated firm in order to maintain BAE's relationship with the US Pentagon – but it has been reported Germany was opposed to this.

At 08:30 BST, BAE shares were 0.5 per cent higher on the LSE to 322.50p, while on the Paris Stock Exchange EADS also gained by 0.5 per cent to €27.62.

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