'Major Tom' fights for EADS-BAE merger

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'Major Tom' fights for EADS-BAE merger

'Major Tom' fights for EADS-BAE merger
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The boss of aerospace group EADS has been trying to convince German lawmakers that they should back its planned merger with British defence firm BAE Systems even though that will diminish the role of European governments.

EADS chief executive Tom Enders told the parliamentary economic affairs committee in Berlin that any state role in the combined company had to be limited for it to be competitive.

He said the defence industry must consolidate and this is good for Europe and in Germany’s best interests.

Enders told reporters: “We want to create a company that is internationally much more successful, that draws new investors and there are many examples to prove that companies in this sector and of this size should not necessarily be subject to state involvement.”

Government approval is needed for a merger as Berlin and Paris each – indirectly – control just over 22 percent of EADS, Spain has 5.4 percent. By contrast BAE is totally in private hands.

The governments of France, Germany, and Britain must all back the merger, which would create the world’s largest aerospace and defence group.

Political tensions could torpedo the tie-up, all three countries want assurances on jobs, industrial strategy and defence activities.

BAE also wants France and Germany to give up their so-called “golden share” special voting rights as well as the power to nominate EADS board members.

All of which means Enders faces quite a fight to sell this deal.

Nicknamed ‘Major Tom’ in Germany, Enders is a former paratrooper with an uncompromising reputation who has clashed with German and French governments before. He will need all of his political acumen to convince Germany and France that the deal’s merits outweigh the drawbacks.