Defence firm in talks over merger

Mutiny Festival brought over �2m to the local economy Picture: Paul Windsor

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DEFENCE giant BAE Systems has confirmed it is in talks over a potential merger with aircraft manufacturer EADS.

If successful, the deal would create the world’s biggest aerospace and defence company.

BAE said a tie-up with European Aeronautic, Defence & Space (EADS) would form a ‘world class’ firm in its sector, with combined sales of £60bn and around 220,000 staff.

Both companies have a strong local presence, with BAE Systems employing around 3,000 people at Portsmouth Dockyard and Astrium, a subsidiary of EADS, employing 1,400 people at Anchorage Road.

A BAE spokeswoman said it was too early to confirm whether there would be any job losses, but stressed there was very little overlap between the two business activities.

BAE said the proposed deal would be a merger, but would see BAE shareholders own 40 per cent of the combined group and EADS shareholders own 60 per cent.

Under takeover rules, both firms have until 5pm on October 10 to announce a deal or walk away.