Europe's four largest aerospace and defence companies have agreed in principle to merging all their assets to form a single, unified aerospace and defence company and have set down guidelines for the merger in a report to the French, German, Spanish and UK governments.

The four Airbus partners, Aerospatiale, British Aerospace, CASA and Daimler-Benz Aerospace (Dasa), announced on 27 March that they had submitted a joint report on the restructuring of the European aerospace and defence industry to the respective governments, in response to a French-German-UK joint statement to industry in late 1997 requesting "a clear plan and detailed timetable" for reorganisation. The report has also been forwarded to the Spanish Govern- ment as it reflects work by the Airbus partners on the transformation of Airbus Industrie into a Single Corporate Entity.

The report, which is confidential, is believed to express agreement by the four companies to incorporate all of their assets into one company with a single unified management with a run-for-profit and shareholder interest-based operating philosophy. Broad agreement has also been reached on a consolidated company, referred to as the European Aerospace and Defence Company (EADC). However, the report is understood to also highlight disagreement with Aerospatiale over shareholder rights simply because of the incompatibility of combining a large, and dominant, Government-controlled shareholding within a broad European company with a distributed and largely private shareholder base.

The French Government this week rejected Aerospatiale's privatisation as a precondition for the restructuring.Feasibility studies of the possible merger, although no timetable has been set. Other companies, namely Finmeccanica, Saab, Dassault Aviation and Lagardère/ Matra will be considered as part of the consolidation.

Source: Flight International