EADS-BAE merger latest

Victoria
By Victoria September 13, 2012 15:09

EADS-BAE merger latest

Late yesterday EADS confirmed BAE Systems’ announcement regarding a possible combination of the two companies, although stated that the possible combination is subject to the approval of the Board of EADS and there can be no certainty that these discussions will lead to a transaction. A further announcement will be made as appropriate, said EADS.

Early yesterday BAE Systems commented, following the recent movement in its price, that it was in discussions with EADS regarding a possible combination of their businesses.

“This potential combination would be implemented through the creation of a dual listed company structure, under which both companies would operate as one group by means of equalisation and other agreements but would be separately listed on their existing exchanges.”

The statement said that the discussions between the parties envisaged that BAE Systems shareholders would own 40% and EADS shareholders 60% respectively of the enlarged group. “It is contemplated that there would be a unified board and management structure with identical boards and executive committees at each of BAE
Systems and EADS.”

Due to the nature of their businesses, discussions have been initiated with a range of governments about the implications of the potential transaction.

“Under the transaction structure being discussed between the parties, BAE
Systems and EADS envisage that certain of their defence activities would be ringfenced with governance arrangements appropriate to their strategic and national security importance, particularly in the USA, given the importance of that market to the enlarged group. In addition, subject to receiving appropriate shareholder approvals, the parties envisage issuing special shares in BAE Systems and EADS to each of the French, German and UK governments to replace the existing UK government share in BAE Systems and the stakeholder concert party arrangements in EADS.”

Adding: “BAE Systems and EADS believe that the potential combination of their two businesses offers the prospect of significant benefits for customers and shareholders of both companies. These benefits include cost savings, such as from procurement and sourcing efficiencies available to the enlarged group, and substantial new business opportunities.”

Victoria
By Victoria September 13, 2012 15:09
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