Europe's Defense Industry: No More Flying Solo?

The BAe-DASA merger may spur deal mania in defense

After years of talk about streamlining Europe's inefficient defense and aerospace industries, there are finally signs of action. Two of the biggest players, British Aerospace PLC (BAe) and DaimlerChrysler Aerospace (DASA), confirm that they are in "advanced" talks on consolidating. The duo would form the cornerstone of a European defense group, with sales in the $25 billion range, on a scale to compete with U.S. giants such as Boeing Co. and Lockheed Martin Corp. BAe is a world leader in airframes and has a lead role in building and designing the Eurofighter. It is far ahead of its European rivals as a low-cost manufacturer. The smaller DASA is strong in aircraft assembly, space technology, and avionics.

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