Plans to form the world’s biggest aerospace and defence company in Europe have crumbled.
The makers of Airbus, EADS, and the British defence contractor BAE Systems threw in the towel, blaming differences between the British, French and German governments.
Specifically, some sources who have remained anonymous, pointed the finger at Germany’s Chancellor Angela Merkel for blocking the deal.
A German official refused to take sole responsibility for the merger’s collapse but recognised that creating a new European defence and aerospace giant would have caused headaches in Berlin.
Germany’s 22.27% of EADS is held by Daimler which has said it wants to reduce its stake.
Lagadere and the French government hold an identical share. Germany pointed out that France had reservations about the merger too.
Sources at the talks said Germany wanted an equal part of the new group as France, and also wanted to shift part of the new headquarters to Munich.
The British government, holding a golden share in BAE, were keen to keep the company free from state control.
BAE’s main shareholder, Invesco Perpetual, had expressed doubts about the merger’s rationale.
Observers always thought that such a complex cross-border deal, combining a myriad commercial and political considerations, was going to be difficult to get off the ground.