BAE Systems, EADS Merger Not A ‘Fundamental Threat’, Says Boeing

  • 12:00 AM, September 14, 2012
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As defense giants BAE Systems and EADS merge their businesses to create a brand new industry leader, rival Boeing has reacted to the news calling the new company a non threat. Boeing is now the largest aerospace leader in the industry and last year brought in revenues of $64.3 billion; this number could be dwarfed by the BAE-EADS merger which could bring in sales worth $93 billion each year. The competing aircraft-maker maintained that the merger will have no impact on its sales worldwide. "I don't see this as something that is going to threaten us fundamentally. And the entity when it’s put together does look a lot more like us," said Jim McNerney, Boeing's chief executive. "I have a pretty deep and abiding faith in our company's strength". Meanwhile, the new merger will see BAE Systems with 40% and EADS with 60% in the formation of the new company which would create a world-class international aerospace, defence and security group with substantial centers of manufacturing and technology in France, Germany, Spain, the UK and the USA. “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” said the BAE statement. Together the companies, if flourishing, EADS has agreed to pay £200m to its shareholders and it is envisaged that the combined group would declare dividends such that BAE Systems shareholders would receive an equivalent amount to that declared in respect of 2012. In the long run, however, the merger could affect not just Boeing but others such as Lockheed Martin.
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