British Aerospace is understood to have held preliminary talks with Italy's Alenia Aerospazio over a possible merger of defence activities.

BAe confirms that John Weston, managing director of BAe Defence, visited Italy early in November but is playing down its significance. The visit has sparked off a raft of merger speculation in the Italian press, however.

With the Italian Government's stated policy to see privatisation of Alenia's parent, Finmeccanica, the company has said that "some or all" of the divisions are available for mergers. The Alenia Difesa defence-electronics arm is already holding talks with GEC.

BAe and Alenia have considerable co-operation activities through the Eurofighter programme and the Aero International (Regional)airliner grouping. Alenia is also discussing joining Airbus Industrie, in which BAe holds a 20% shareholding.

Source: Flight International