11 Oct 12. The board of EADS (EAD.PA) renewed its confidence in Chief
Executive Tom Enders a day after the collapse of merger talks with BAE Systems (BA.TO) and encouraged him to continue his leadership of the company, an EADS spokesman said.
“The board expressed strong support for Tom Enders and his team and encouraged him to continue on his track,” the spokesman said on Thursday.
Talks to create a $45bn aerospace and defense company with BAE broke down on Wednesday amid political disagreements over the deal. (Source: Reuters)

11 Oct 12. BAE Systems (BA.TO) moved to patch up damaged relations with its investors, promising imminent meetings to discuss its strategy after the failure of its attempted merger with EADS (EAD.PA), shareholders told Reuters on Thursday. Investors are keen to hear management make its case and explain how Europe’s biggest defense contractor plans to keep growing when governments are cutting back on their military spending.
“We want to sit down with the company to talk through exactly why they wanted to do this deal, and now that it won’t be going ahead, what are the plans,” said one of BAE’s top 20 shareholders. “They implied this was a strategic necessity, and now they say this setback is fine and that they can carry on as normal. Well, which is it?”
Investors contacted by Reuters after the proposed deal fell through said BAE’s management has said it will meet them, possibly within days, to outline its plans. Earlier this week fund manager Invesco, BAE’s biggest shareholder with more than 13 percent of the company, fired a broadside at the company in an attempt to sink the merger, citing concerns over state interference, poor terms and lack of strategic rationale. But now the deal is off the table many of the investors said they remained supportive of BAE’s managers but still expect to see a robust plan for the company’s future, and will not settle for pledges to find an alternative suitor, perhaps in the United States as a solution to its immediate challenges.
“They need to be clear now. The last thing you want to hear is they’re just going to wait for a better suitor to come over the hill. You want them to be actively managing the business and getting on with the day-to-day business of winning more international contracts,” said another leading shareholder. (Source: Reuters)

10 Oct 12. The quick death of a proposed merger between European aerospace and defence giants BAE Systems PLC and EADS NV Wednesday has dashed faint hopes of increased liberalization of the continent’s highly fragmented defence market.
“This highlights the real challenges for Europeans in their attempt to create an integrated defence industry and market,” said Clara Marina O’Donnell, a research fellow with the Centre for European Reform think tank. “We had three countries with three different approaches to defence that were impossible to reconcile.”BAE, Britain’s biggest defence company, and EADS, the European aerospace giant that owns Airbus, announced the collapse of the deal that would have created the world’s biggest aerospace and defence group, shortly before their deadline to launch a formal merger proposal. They blamed their inability to overcome government opposition. “We are obviously disappointed that we were unable to reach an acceptable agreement with our various government stakeholders,” Ian King, chief executive officer of BAE, said in a statement. The merger was designed to create a European defence and aerospace giant that could compete with Boeing Co. in everything from commercial aircraft to nuclear submarines. EADS would also have been joining a company that had much better luck winning U.S. defence orders. The deal was fraught with political difficulties from the start. The French and German governments wanted to exert effective control over the enlarged company (Together, they would have owned 27 per cent of the combined firm). Britain objected to formation of a company where Franco-German inte