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EADS and BAE: A Giant in the Making

The companies confirm merger talks
A BAE Systems Eurofighter Typhoon jet under construction at the Military Air Solutions facility in Warton, Lancashire.
A BAE Systems Eurofighter Typhoon jet under construction at the Military Air Solutions facility in Warton, Lancashire. Photograph by Chris Ratcliffe/Bloomberg News

Europe has tried for more than a decade to build a defense business to rival Boeing and other U.S. aerospace giants. Now that goal could be within reach. The European Aeronautics Space & Defence Co., the parent of Airbus, is in advanced talks about a possible merger with British defense group BAE Systems.

BAE and EADS confirmed the discussions in a statement Sept. 11 after the talks were initially reported by Bloomberg News. They said the merged group would be owned 60 percent by EADS and 40 percent by BAE. The two companies would remain separately listed, however, and some BAE holdings would be “ringfenced” to protect existing defense contracts.