City analysts have dismissed this week’s talk of an impending merger between British Aerospace and Daimler-Benz Aerospace (Dasa).
One analyst said he believed the speculation was fuelled by pressure to boost the companies’ share prices. He said talk of an impending merger ‘had a beneficial impact on share prices. The timing was fortuitous, given the pressure on the Daimler Chrysler merger in the US.’ Daimler-Benz shares rose 14% on Monday’s news.
The analyst cautioned that although Daimler was keen on reorganisation and consolidation of the industry, it insisted that nothing was imminent.
Dasa said it was under mounting pressure to agree a merger. It is understood to be keen to secure an interim bilateral deal with BAe, which would be administered through a Dutch holding company.
This would leave open the option of including France’s Aerospatiale once Dasa’s and BAe’s worries about the French state’s role in the firm are dealt with. Both feel the French government has not gone far enough in turning Aerospatiale into a privately owned company.
BAe this week again confirmed its talks with Dasa, which have been known about for some months. But BAe was more cautious than Dasa. ‘It is too early to say whether these discussions will result in definitive proposals,’ a spokesman said.
Any BAe/Dasa arrangement may also involve Sweden’s Saab 35% owned by BAe and Spain’s Casa.
The motivation behind proposed European aerospace and defence industry mergers in Europe is to create a company strong enough to compete with US giants like Lockheed Martin, Boeing and Raytheon.
This is worrying the US Defence Department, which last week created a Defence Science Board taskforce to see how European defence industry consolidation could affect US national security.