BAE Systems abandons £28bn merger plans

British defence giant BAE Systems confirmed today that plans for a £28bn (€34.66bn) merger with French rival EADS have been scrapped.

The deal would have created a defence titan with combined sales of £60bn (€74.3bn) and more than 220,000 staff, with around 52,000 employees in the UK.

BAE said it had become clear that the interests of government stakeholders - including those in France and Germany – could not be reconciled with each other or with the company’s objectives.

Unions believed the link-up would have created a strong company to guarantee jobs in the long term.

BAE chief executive Ian King said the British business remained “strong and financially robust” and added: “We are obviously disappointed that we were unable to reach an acceptable agreement with our various government stakeholders.”