Andrew Doyle/MUNICH

The founder members of EADS (European Aeronautic Defense and Space) and BAE Systems are close to reaching agreement on the establishment of an Airbus Integrated Company (AIC) and could seal a deal at the consortium's next supervisory board meeting on 26 May.

Reports say BAE will retain veto rights on certain key questions, and has secured a binding contract to remain the designer and producer of wings for Airbus aircraft. A BAE veto might approximate the French Government's power in EADS, where it has veto rights over major acquisitions, large capital increases, ownership changes and alliance deals.

BAE is believed to be seeking a veto on any closure of Airbus sites in the UK and could retain a blocking vote on ownership issues - complicating EADS' deal with Italy's Alenia, which was promised a 5% stake in Airbus.

Airbus managing director Noel Forgeard revealed details of the discussions in an interview with Germany's Handelsblatt newspaper. His public comments on the matter appeared to take the EADS partners by surprise, as the Airbus boss - due to head the EADS Airbus division - is not directly involved in the talks. "We are having a very constructive dialogue and we have always said that we would like to finish as soon as possible," say the EADS partners. UK sources add that "BAE is pushing for as much as it can get".

The main issue yet to be resolved is believed to be the valuation of Airbus assets. It is thought that BAE may be awarded a one-time cash payment on top of its current 20% share in Airbus.

Source: Flight International