British defense firm BAE Systems and Airbus parent company EADS on Wednesday announced their decision to terminate their merger plan due to disagreements with the British, French and German governments.
"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," the two firms said in a joint statement.
The two companies underlined the proposed combination was based on industrial logic and should have generated greater power than the sum of the two parts.
The merger plan, first announced on Sept. 12, aimed to create a global aerospace and defense giant through a dual-listed company structure, whose revenues were supposed to surpass the U.S. Boeing Company.
They also said discussions with relevant governments had not reached a stage where they could fully disclose the benefits and detailed business case for this merger.
BAE chief executive Ian King said: "We are obviously disappointed that we were unable to reach an acceptable agreement with our various government stakeholders."
"It is, of course, a pity we didn't succeed but I'm glad we tried," EADS chief executive Tom Enders said.
Later in the day, German Defense Minister Thomas de Maiziere denied that the collapse of the merger was Germany's fault, saying that "it is a commercial decision."