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Airbus and BAE in merger discussions

Thursday, September 13 09:25:07

Discussions are under way between BAE Systems, the UK based defence manufacturer and the parent company of Airbus (EADS) and if successful Europe will have a defence and aerospace conglomerate to rival any in the world. The merged companies would have combined sales of more than E70 billion ($90.3 billion) and more than 220,000 employees.

EADS is already one of Europe's biggest companies, parent to planemaker Airbus, helicopter maker Eurocopter, satellite builder Astrium and defense electronics contractor Cassidian. Airbus and EADS have long been rivals to U.S.-based Boeing Co. in civil and defense aviation. The proposed deal is a clear shot at catching up to Boeing's defense business - and passing it. The U.S. and European firms have fought ruthlessly in the courts over government subsidies, and competed for years for a huge contract to build new aerial refueling tankers for the U.S. Air Force, a contract Boeing finally won.

Boeing's defense and space business had revenue last year of almost $32 billion, from selling Chinook helicopters and F-18 fighter jets to the U.S. and, increasingly, other countries. Defense revenue at EADS was a little more than half as much - but by adding BAE, the combined company would have a defense business significantly bigger than Boeing's.