Major BAE merger concerns governments

The chief executive of EADS has been asked to present details of the company’s proposed merger with BAE Systems to the German government, which is concerned that the £29bn deal could lead to job cuts or threaten national security.

It is expected that parliament will request that the deal, which currently favours EADS in a 60-40 split, move further in the Franco-German company’s favour, giving it 70 per cent control.

Meanwhile, Britain’s cross-party parliamentary defence committee launched an inquiry into the possible merger. The government holds a special ‘golden share’ in BAE, which allows it to veto any merger or takeover.

In addition, there are further concerns that the deal could downgrade BAE’s security rating with the American government, which would in fact make it tougher to win defence contracts in the States, rather than easier as bosses had hoped.

EADS has more than 133,000 employees in 170 locations around the world and BAE has more than 93,000 employees. BAE has major bases in Warton and Samlesbury and employs 11,000 in the county.