Airbus and BAE Systems in talks over possible merger

Reception for Airbus and BAE Systems sites at Filton, Bristol.

EADS, parent company of Airbus, and BAE Systems – both companies with major bases in Filton – have announced that they are in talks over a possible merger.

The news was revealed in a statement to the Stock Exchange on Wednesday (12th September) following a sudden 8% rise in the price of BAE Systems’ shares.

Airbus employs around 4,000 people at its Filton site, which specialises in wings, landing gear, fuel systems and composite technology. Defence manufacturer BAE Systems employs around 700 staff at Filton and other locations in Bristol.

EADS and BAE Systems are both major stakeholders in missile developer and producer MBDA, which also has a base at Filton.

The merger would be implemented through the creation of a dual listed company structure, under which both companies would operate as one group by means of equalisation and other agreements but would be separately listed on their existing stock exchanges.

Should the deal go through, BAE would own 40% and EADS 60% of the new firm.

A spokesperson for BAE said:

“The potential combination would create a world-class international aerospace, defence and security group with substantial centres of manufacturing and technology excellence in France, Germany, Spain, the UK and the USA.”

Experts say the deal would benefit BAE Systems by giving more balance to its business, diluting the current over-dependence on defence work in the UK and US.

Airbus is currently constructing a new Aerospace Park at its Filton site, a project that includes the restoration of Pegasus House.

Filton Airfield, owned by BAE Systems, is due to be closed at the end of 2012 and looks likely to be sold off for housing and industrial use, subject to the approval of South Gloucestershire Council’s Core Strategy planning blueprint by an independent inspector.

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