Boeing on Merger Talk

European defense giants BAE Systems and EADS appear close to completing a corporate merger, and Boeing Chief Executive Officer Jim McNerney -- speaking at the Council on Foreign Relations today -- was asked for his view on how that joint company would impact Boeing. His response:

I just caught those rumors this morning myself. I think from my perspective, and I'm thinking about it quickly here, I have a pretty deep and abiding faith in our company's faith, OK, so I don't see this as something that is going to threaten us fundamentally. It does reflect a global consolidation that is beginning to happen. I think this may be a matter of, from an EADS standpoint, maybe some increased U.S. market access because of BAE's entity here, and the entity, when it is put together, does look a little bit more like us. That's been a steady them in EADS' development over the years.

BAE issued a statement to the London Stock Exchange this morning confirming rumors about the merger, and EADS has posted a similar statement on its own website which notes that EADS would own 60 percent of the proposed new company. The BAE statement reads:

BAE Systems and EADS have a long history of collaboration, and are currently partners in a number of important projects, including the Eurofighter and MBDA joint ventures. The two companies confirm that they are now in discussions about a possible combination of the businesses. The potential combination would create a world leading international aerospace, defence and security group with substantial centres of manufacturing and technology excellence in the UK, USA, France, Germany and Spain as well as in Australia, India and Saudi Arabia.

BAE Systems and EADS believe that the potential combination of the two businesses offers significant benefits for all stakeholders, over and above their individual business strategies, which both businesses continue to execute strongly. In particular, they believe that the combination of the two complementary businesses offers the opportunity of greater innovation, long term financial stability, and an extended market presence, which will enable them to compete even more effectively on the world stage.

Any agreement on the terms of a potential combination will require approval by the Boards of both BAE Systems and EADS, and would be subject to, amongst other things, a number of governmental, regulatory and shareholder approvals. There is no certainty at this stage that the discussions will ultimately lead to a transaction.

BAE Systems is a strong, well-run company, successfully implementing our strategy. During the process of the discussions with EADS, BAE Systems will continue to focus in meeting all of their current commitments.