Major EADS shareholders balk at merger

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PARIS, Oct. 1 (UPI) -- A critical EADS shareholder, the media group Lagardere, said it had strong reservations about the proposed merger with British defense contractor BAE Systems.

"Despite the industrial and strategic potential attributed to it, this plan has not yet demonstrated that it was creating value for EADS," Lagardere said in a statement, adding, "Lagardere considers at this stage that the merger conditions between EADS and BAE are unsatisfactory."

Lagardere controls 7.5 percent of aerospace giant EADS, The Financial Times reported Monday.

Lagardere also said the interests "of all the French controlling shareholders of EADS" would be better served by a "re-examination" of the deal.

Arnaud Lagardere is Lagardere's chief executive officer, but he is also chairman of EADS.

Lagardere has expressed its interest in selling its shares of EADS, but said the merger with BAE undervalues EADS.

In September, Dieter Zetsche, chief executive officer of German automotive company Daimler, a major shareholder, also said he had reservations.

"Our interest, of course, is to maintain the value of our stake for the transaction and in this regard I should not claim I'm extremely happy about the recent developments," he said.