EADS and BAE Might Merge To Create Aerospace Juggernaut

A blog about business and economics.
Sept. 12 2012 3:27 PM

EADS and BAE Pondering Merger To Create European Aerospace Juggernaut

BERLIN, GERMANY - SEPTEMBER 11: John Leahy, chief commercial officer of Airbus, poses with a model of an Airbus A320 airplane during the company's press conference at the 2012 Internationale Luftausstellung (ILA) Air Show on September 11, 2012 in Berlin, Germany.

Photo by Adam Berry/Getty Images

A statement out today from BAE Systems says the UK-based military contractor is considering a merger with EADS, the European Aeronautic Defense and Space Company, which would create an aerospace juggernaut on the other side of the Atlantic.

EADS isn't a household name, but it's the parent entity for Airbus—Boeing's rival in the civilian jet world—so this would be a very big deal. The basic logic of a merger is pretty simple, namely that the combined company would be more diverse and better-balanced than either EADS or BAE. A combined operation might be better-situated to survive austerity-induced cuts in European military budgets, and better-positioned to take advantage of such growth opportunities as may emerge in the developing world.


But actually getting this done would be a very sticky process. EADS is partially owned by the French, German, and Spanish governments and the UK government has a stake in BAE. Meanwhile, the passenger aviation business is something the state is pretty heavily involved with and the defense contracting industry is obviously even more so. So look for the negotiations around this to be long, complicated, and heavily politicized. At an earlier iteration of the history of Airbus, BAE's corporate predecessor was involved and it was only in 2006 that it ceased to be EADS' junior partner in the consortium. So merging would be a major flip-flop of corporate philosophy on the part of someone or other.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.



Talking White

Black people’s disdain for “proper English” and academic achievement is a myth.

Hong Kong’s Protesters Are Ridiculously Polite. That’s What Scares Beijing So Much.

The One Fact About Ebola That Should Calm You: It Spreads Slowly

Operation Backbone

How White Boy Rick, a legendary Detroit cocaine dealer, helped the FBI uncover brazen police corruption.

A Jaw-Dropping Political Ad Aimed at Young Women, Apparently

The XX Factor
Oct. 1 2014 4:05 PM Today in GOP Outreach to Women: You Broads Like Wedding Dresses, Right?

How Even an Old Hipster Can Age Gracefully

On their new albums, Leonard Cohen, Robert Plant, and Loudon Wainwright III show three ways.

How Tattoo Parlors Became the Barber Shops of Hipster Neighborhoods

This Gargantuan Wind Farm in Wyoming Would Be the Hoover Dam of the 21st Century

Oct. 1 2014 8:34 AM This Gargantuan Wind Farm in Wyoming Would Be the Hoover Dam of the 21st Century To undertake a massively ambitious energy project, you don’t need the government anymore.
  News & Politics
Oct. 1 2014 7:26 PM Talking White Black people’s disdain for “proper English” and academic achievement is a myth.
Buy a Small Business
Oct. 1 2014 11:48 PM Inking the Deal Why tattoo parlors are a great small-business bet.
Oct. 1 2014 6:02 PM Facebook Relaxes Its “Real Name” Policy; Drag Queens Celebrate
  Double X
The XX Factor
Oct. 1 2014 5:11 PM Celebrity Feminist Identification Has Reached Peak Meaninglessness
  Slate Plus
Behind the Scenes
Oct. 1 2014 3:24 PM Revelry (and Business) at Mohonk Photos and highlights from Slate’s annual retreat.
Brow Beat
Oct. 1 2014 9:39 PM Tom Cruise Dies Over and Over Again in This Edge of Tomorrow Supercut
Future Tense
Oct. 1 2014 6:59 PM EU’s Next Digital Commissioner Thinks Keeping Nude Celeb Photos in the Cloud Is “Stupid”
  Health & Science
Oct. 1 2014 4:03 PM Does the Earth Really Have a “Hum”? Yes, but probably not the one you’re thinking.
Sports Nut
Oct. 1 2014 5:19 PM Bunt-a-Palooza! How bad was the Kansas City Royals’ bunt-all-the-time strategy in the American League wild-card game?