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.



The Ebola Story

How our minds build narratives out of disaster.

The Budget Disaster That Completely Sabotaged the WHO’s Response to Ebola

PowerPoint Is the Worst, and Now It’s the Latest Way to Hack Into Your Computer

The Shooting Tragedies That Forged Canada’s Gun Politics

A Highly Unscientific Ranking of Crazy-Old German Beers


Welcome to 13th Grade!

Some high schools are offering a fifth year. That’s a great idea.


The Actual World

“Mount Thoreau” and the naming of things in the wilderness.

Want Kids to Delay Sex? Let Planned Parenthood Teach Them Sex Ed.

Would You Trust Walmart to Provide Your Health Care? (You Should.)

  News & Politics
Oct. 22 2014 9:42 PM Landslide Landrieu Can the Louisiana Democrat use the powers of incumbency to save herself one more time?
Continuously Operating
Oct. 22 2014 2:38 PM Crack Open an Old One A highly unscientific evaluation of Germany’s oldest breweries.
Dear Prudence
Oct. 23 2014 6:00 AM Monster Kids from poorer neighborhoods keep coming to trick-or-treat in mine. Do I have to give them candy?
  Double X
The XX Factor
Oct. 22 2014 4:27 PM Three Ways Your Text Messages Change After You Get Married
  Slate Plus
Tv Club
Oct. 22 2014 5:27 PM The Slate Walking Dead Podcast A spoiler-filled discussion of Episodes 1 and 2.
Oct. 22 2014 11:54 PM The Actual World “Mount Thoreau” and the naming of things in the wilderness.
Future Tense
Oct. 22 2014 5:33 PM One More Reason Not to Use PowerPoint: It’s The Gateway for a Serious Windows Vulnerability
  Health & Science
Bad Astronomy
Oct. 23 2014 7:30 AM Our Solar System and Galaxy … Seen by an Astronaut
Sports Nut
Oct. 20 2014 5:09 PM Keepaway, on Three. Ready—Break! On his record-breaking touchdown pass, Peyton Manning couldn’t even leave the celebration to chance.