BAE Systems and Airbus-parent EADS are in discussions about a possible merger, confirmed the companies on Sept. 12. The parties envision that EADS shareholders would own 60 percent and BAE Systems shareholders would own 40 percent of the new entity, states an EADS release with information from both companies. There would be a unified board and management system, it states. The two companies “have a long history of collaboration” and are currently partnered in projects like the Eurofighter, states a separate BAE Systems release. It adds, “The potential combination would create a world-leading international aerospace, defense, and security group with substantial centers of manufacturing and technology excellence” worldwide. Boeing Chief Executive Officer Jim McNerney said Boeing did not feel threatened by the proposed merger, reported Reuters on Sept. 12. EADS last year lost out to Boeing for the rights to build the Air Force’s KC-46A tanker and remains an archrival of Boeing in the commercial airliner market. “I have a pretty deep and abiding faith in our company’s strength, so I don’t see this as something that is going to threaten us fundamentally,” said McNerney.
The Air Force and Boeing agreed to a nearly $2.4 billion contract for a new lot of KC-46 aerial tankers on Nov. 21. The deal, announced by the Pentagon, is for 15 new aircraft in Lot 11 at a cost of $2.389 billion—some $159 million per tail.