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Germany has been blamed for the collapse of a merger between Britain's BAE Systems and European rival EADS.
BAE is the UK's biggest manufacturer, employing 35,000 people, and as our Business Editor, Laura Kuenssberg reports, in the long run, some of those jobs could be at risk following the collapse of the deal.
A minister denied today that "discord" between the UK, France and Germany was behind the collapse of a £28 billion merger of defence company BAE Systems and rival EADS.
Business minister Lord Marland insisted the Government had "very positive" relationships with France and Germany and that had not influenced the outcome.
- With 220,000 staff worldwide - including 52,000 in the UK - and combined sales of £60 billion a merger would have created a new market leader bigger than Boeing in size.
- The merger would have combined BAE's defence expertise - including lucrative UK and US contracts - with Airbus parent EADS's leading position in the commercial aircraft and aerospace sector.
- Unions also supported the deal believing it would have created a stronger company to guarantee long term jobs.
- There were also hopes the merger would mean Airbus UK - which supports 140,000 British jobs - would remain on these shores.
Defence Secretary Philip Hammond said a "number of things" stopped the merger deal between BAE Systems and EADS.
Mr Hammond added that despite the deal falling through, the British defence company still had a "great future".
Defence Secretary Philip Hammond said the merger of defence giant BAE Systems and European rivals EADS collapsed because it was "too difficult" to reconcile the differences of the governments involved.
Shadow Defence Secretary Jim Murphy has urged government ministers to "urgently convene" talks to "develop a fresh defence industrial plan" after the proposed BAE-EADS merger was called off.
Mr Murphy said:
BAE has sent a notice to all its 93,500 employees explaining the "disappointing outcome" of its merger talks with EADS.
The letter, written by CEO Ian King, states:
Mr King also highlighted that BAE would "remain close partners with EADS" and thanked BAE's employees for their "support, determination and hard work".
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.
A BAE Systems source said the proposed merger was seen as an "opportunity" rather than an "absolute necessity" for the company.
The company has won a number of contracts this year, including:
- £149 million for Typhoon and Tornado support to the RAF
- £446 million for Typhoon support across other countries including Germany, Italy and Spain
- £116 million for production of aircraft fuselage assemblies
- £328 million for the design and development of the replacement Vanguard Class submarine
- £1.6 billion to supply aircrew training to the Royal Saudi Air Force
Latest ITV News reports
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.