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GEC in BAe-Dasa defence mechanism

BAe and Dasa have been in talks for several months over a full merger and could announce a deal any day.

Sunday newspaper reports suggested that GEC is also believed to be interested in combining its Marconi Electronics defence arm with the business.

The heads of BAe and GEC - Sir Richard Evans and Lord Simpson - are believed to have discussed a deal where Marconi Electronics would be added to the new company in a second phase of the merger process.

Consolidation

Europe's defence sector is trying to consolidate in the face of stiff competition from the top three US players, Boeing, Lockheed Martin and Raytheon.

A year ago, European governments called called on industry leaders to overcome their difficulties and create a pan-European aerospace and defence company (EADC). Any merger between BAe and Dasa could form the nucleus of EADC.

Power-sharing

If a merger takes place, BAe-Dasa is expected to be chaired jointly by Sir Richard and Manfred Bischoff, chief executive of the German company.

Along with GEC Marconi, BAe and Dasa are also thought to want to include Aerospatiale Matra - a consolidation of French companies expected to be established in 1999.

A spokesman for BAe refused to comment on the talks or identify any of the parties involved.

He said: "We are involved in discussions with a number of major industry participants and some of those discussions are at an advanced stage but as yet there is no definite agreement."

A spokesman for GEC said that the company was in discussions with all the main parties in the defence industry and hoped to reach a conclusion soon.

Relevant Stories

BAe in defence merger talks (07 Dec 98 | The Company File)
London market report (07 Dec 98 | The Markets)
GEC axes 1,500 jobs (03 Dec 98 | The Company File)
GEC poised for merger (03 Dec 98 | The Company File)
BAe denies Dasa merger imminent (12 Oct 98 | The Company File)
BAe and Dasa 'set to merge' (12 Oct 98 | The Company File)

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