Rumors Surface That Boeing and BAe Systems May be Talking Merger

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Rumors Surface That Boeing and BAe Systems May be Talking Merger

The London Sunday Telegraph reports that Boeing has been negotiating with BAe Systems (formerly British Aerospace) regarding a possible merger. For some months an alliance or corporate linkup has been expected, but speculation that a merger may be in the offing has now surfaced. Neither company would offer comment on the rumors.

BAe is a Boeing supplier, and a partner in products such as the AV-8B Harrier jump-jet and the T-45 jet trainer. BAe is also a competitor, partnering with Lockheed Martin in the Joint Strike Fighter program. Both Boeing and BAe have been considering buying stakes in Korea Aerospace Industries. BAe does have a 20 percent stake in Airbus, which would have to be divested prior to any actual merger.

A merger would give Boeing a foothold in Europe, making it easier for Boeing to bid for work there. The estimated value of the merger is US$ 46 billion, with products spanning the aerospace market: commercial passenger jetliners, fighter jets and other military aircraft/systems, satellites, rockets and missiles. A merger would require approvals from the U.S. Departments of Defense and Justice, the Federal Trade Commission, and the European Commission.

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April 10, 2000

Andrews Space & Technology