From the outset of discussions between the parties, both BAE Systems and EADS were clear that they would proceed with a merger of their businesses only if a transaction structure could be created that aligned the interests of the parties' stakeholders and received their support. BAE Systems and EADS worked constructively to deliver such a structure. 

Notwithstanding a great deal of constructive and professional engagement with the respective governments over recent weeks, 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. BAE Systems and EADS have therefore decided it is in the best interests of their companies and shareholders to terminate the discussions and to continue to focus on delivering their respective strategies. 

Ian King, Chief Executive of BAE Systems, today said "We are obviously disappointed that we were unable to reach an acceptable agreement with our various government stakeholders.  We believe the merger presented a unique opportunity for BAE Systems and EADS to combine two world class and complementary businesses to create a world leading aerospace, defense and security group. 

“However, our business remains strong and financially robust. We continue to see opportunities across our platforms and services offerings and in the various international markets in which we operate.  We remain committed to delivering total shareholder value and look to the future with confidence." 

Tom Enders, Chief Executive of EADS, today said "I'd like to thank everybody who supported us, in particular all the colleagues at BAE Systems and EADS for all their hard work and dedication to this project in recent months. A special thank-you goes to Ian King for his trust and partnership. It is, of course, a pity we didn't succeed but I'm glad we tried. I'm sure there will be other challenges we'll tackle together in the future. EADS will continue on its international growth path and our shareholders can continue to expect profitable growth, excellent liquidity and program execution based on a strong order book." 

BAE Systems is a British multinational defence, security and aerospace company headquartered in London, United Kingdom and with operations worldwide. It is among the world's largest defence contractors; it ranked as the third-largest based on applicable 2011 revenues. Its largest operations are in the United Kingdom and United States, where its BAE Systems Inc. subsidiary is one of the six largest suppliers to the US Department of Defense. 

The European Aeronautic Defense and Space Company is a global pan-European aerospace and defence corporation and a leading defence and military contractor worldwide. The group includes Airbus as the leading manufacturer of commercial aircraft, with Airbus Military covering tanker, transport and mission aircraft; Eurocopter as the world's largest helicopter supplier; Astrium, the European leader in space programs from Ariane to Galileo; and Cassidian as a provider of comprehensive and integral systems solutions for aerial, land, naval and civilian security applications.