Mergers failure in the European defence technological and industrial base. The case of EADS / BAE systems

Pierre Barbaroux and Blandine Laperche ()
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Blandine Laperche: RRI

No 33, Working Papers from Réseau de Recherche sur l’Innovation. / Research Network on Innovation

Abstract: This paper deals with the project of a merger between BAE systems and EADS, announced in September 2012 and finally cancelled one month later. It investigates the rationale of the merger project and the reasons that explain its collapse. Our first aim is to assess the importance - usually put forward in the literature - of the pre-merger phase in the success or the failure of a merger project. Our second aim is to put forward the specificities of mergers when defence firms are involved. Using a single case study methodology, we show that the economic rationality of the project was based on industrial complementaries, economic synergies and personal motives. We then investigate the many political divergences, specific to the defence industry, that emerged during the pre-merger phase. Finally, considering the economic and political stakes, we suggest the merger project appeared as too big to succeed.

Keywords: Merger; EADS; BAE Systems; Defence; European Defence Technological and Industrial Base (EDTIB) (search for similar items in EconPapers)
JEL-codes: G34 L10 L64 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2013
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Published in Documents de travail du RRI, 2013

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Persistent link: https://EconPapers.repec.org/RePEc:rii:rridoc:33

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