EADS and BAE break off merger talks

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LONDON, Oct. 10 (UPI) -- Aerospace and defense industry giants EADS and BAE Systems said Wednesday they abandoned merger talks after failing to win government support in Europe.

The two companies called it quits just a few hours short of a deadline for announcing whether or not they would proceed with a deal, The New York Times reported.

With France, Spain and Germany owning large shares in EADS, finding government support proved problematic. Had they been able to combine forces, it would have created a company valued at $50 billion, the Times said.

Much of the dispute centered on Germany's insistence that the companies guarantees employment for German workers. In addition, a merger was thought to be a possible threat to BAE Systems contracts in the United States, given significant shares of EADS are owned by European governments.

"It has become clear that the interests of the parties' government stakeholders cannot be adequately reconciled with each other or with the objectives that BAE Systems and EADS established for the merger," the companies said in a statement.

BAE has its headquarters in London and EADS in Leiden, Netherlands.