Back £28bn merger, bosses urge

Ian King, chief executive of BAE Systems and Tom Enders, his EADS counterpart appealed for political support for the plan, saying it would create a global company that would be more than the sum of its parts.

Although the merger is a commercial deal, the approval of the British, French and German governments will be needed if it is to go ahead.

The United States is understood to be taking a close interest in the deal because of BAE’s involvement in sensitive US defence projects.

In a joint article published by the Financial Times, German paper Die Süddeutsche Zeitung and French paper Le Monde, they attempted to reassure politicians’ concerns and urged them to back the deal.

Saying the merger was “borne out of opportunity, not necessity”, they wrote: “BAE Systems and EADS are both strong businesses with clearly defined strategies that have enabled them to make progress in the last five years, and which would take them forward as independent companies.

“But there comes a time when it is right to seize the moment and to create something that is even stronger and better.

“We believe that time is now. With the necessary political will and support, management determination, and proper governance, BAE Systems and EADS can produce a whole that is greater than the sum of its parts.”

They added that the firms proposed to replace the shareholder arrangements which currently give Daimler, French multi-national Lagardère and the French state joint control over EADS.

They are also making arrangements that would, if a merger is agreed, “protect the strategic and national security interests of the governments with which we work, particularly in France, Germany, the United Kingdom and the United States, given the importance of those markets to the combined group”, they added.

The British Government holds a “golden share” in defence contractors BAE, which means it can veto any merger or takeover of the company.

Prime Minister David Cameron has spoken to French President Francois Hollande and German Chancellor Angela Merkel about the deal.

BAE has previously said that the planned tie-up with Airbus owner EADS will form a ``world-class’’ company in its sector, with combined sales of £60bn and about 220,000 staff. The merged group would employ about 48,000 in the UK alone.

The deal, which will give BAE access to the lucrative civil aviation market, will leave BAE shareholders with 40 per cent of the combined group.

“Clearly, there will be scope for efficiency savings when two companies of our size come together, but great benefit will derive from our ability to exploit new business opportunities,” the men wrote.

“That has to be good for jobs and economic prosperity in the long term. It would also mean that we can ensure our key markets stay at the cutting edge of technological development.”

The two companies have until October 10 to finalise terms under Takeover Panel rules.