The French and UK governments were in favour of merging BAE and EADS after solutions were found to all the issues raised by both administrations, an EADS spokesman told the Reuters news agency.
Although the German government was opposed to deal, it failed to provide a "firm reason" why, the spokesman added.
It has not taken long since the collapse of the proposed merger with Franco-German company EADS for the BAE board to be put under pressure.
The EADS and BAE mega merger is not going to go ahead, at least for now.
Talks between the two major defence companies continued into the night as they look to strike a deal.