BAE Systems, EADS in Merger Talks

Combined company would be larger than Boeing.

EADS

EADS

In what would be a blockbuster shakeup of Europe’s aerospace industry, Britain’s BAE Systems and Airbus-owner EADS announced on Wednesday that they have entered advanced merger talks to create an industry behemoth that would overtake rival Boeing in global sales.

The proposed deal, the biggest in Europe since the 2000 merger that created EADS under joint French and German control, would have sweeping implications for the defense industry, where both companies are major players.

The deal reportedly would give BAE shareholders 40 percent and EADS investors the remaining 60 percent of the combined company. The group’s products would include Airbus commercial jets and military transports, Eurocopter helicopters and the BAE-made Tornado fighter, among scores of other products.

The early word is that European antitrust regulators might have more concerns about the merger than their U.S. counterparts. Nevertheless, the combination of BEA and EADS could provide formidable competition to Boeing’s defense business.

An official announcement about whether the companies plan to move forward with the merger plan is expected next month.