BAE merger deal called off

This is a decision of fine judgment and the BAE Systems workforce will be relieved that the management did not rush into a situation that could have destabilised a very successful company.

There were too many 'ifs' or 'buts' and grey areas which, if the merger had gone ahead, were causing serious concern. GMB now hopes that BAE Systems will focus on what they do very successfully and the company must look to world markets for opportunities that will provide employment for their highly skilled workforce across the UK.

The two companies will remain as successful independent companies, each with a significant presence in the UK. The Government has always been clear that it could see the commercial logic of this deal but that it would only ever work if it met the interests of all the parties involved. Today the two companies decided that a merger cannot be concluded on this basis.

I'd like to thank everybody who supported us, in particular all the colleagues at BAE Systems and EADS for all their hard work and dedication to this project in recent months.[...] It is, of course, a pity we didn't succeed but I'm glad we tried.

I'm sure there will be other challenges we'll tackle together in the future.

We are obviously disappointed that we were unable to reach an acceptable agreement with our various government stakeholders.

We believe the merger presented a unique opportunity for BAE Systems and EADS to combine two world class and complementary businesses to create a world leading aerospace, defence and security group.

However, our business remains strong and financially robust....We remain committed to delivering total shareholder value and look to the future with confidence.

Notwithstanding a great deal of constructive and professional engagement with the respective governments over recent weeks, it has become clear that the interests of the parties' government stakeholders cannot be adequately reconciled with each other or with the objectives that BAE Systems and EADS established for the merger.

BAE Systems and EADS have therefore decided it is in the best interests of their companies and shareholders to terminate the discussions and to continue to focus on delivering their respective strategies.

The highly skilled workforces of both companies are the beating heart of British manufacturing. A merger, with a jobs guarantee, would have created a strong new company that could have protected the UK’s long term interests.

There was an industrial logic to the merger, but national and political interests proved to be the stumbling block. The UK government now needs to strengthen its ‘golden share’ and send a powerful message that it backs British manufacturing and BAE Systems.