LONDON--John Parker, one of the U.K.'s most respected
industrialists and a non-executive director of European Aeronautic
Defence & Space Co. NV (EAD.FR), says the importance of scale
in the global defense industry - known for its long lead times -
explains why it is important for BAE Systems PLC (BA.LN) to tie up
with the Franco-German aero-defense group.
In an interview with the U.K.'s Independent newspaper published
Tuesday, Mr. Parker said: "The reality is that aerospace and
defence are industries which have a long lead cycle and need to be
strong to compete in world markets."
He added, "It's a pity the merger plans were leaked before we
could publish the formal offer, as everyone - the press, and the
politicians - has tried to write the prospectus before we have had
a chance to publish it. Hopefully, we will soon.
"Together, the companies have a stronger future; a stronger
balance sheet, a better and more modern governance to be able to
compete with companies such as Boeing and new ones emerging in the
East".
Merging BAE and EADS would create the world's biggest
aero-defense group by sales, ahead of U.S. rivals Boeing Co. (BA)
and Lockheed Martin Corp. (LMT).
Negotiations between the U.K., France and Germany on how to
preserve some influence over the enlarged company are "a strong
outward and visible sign that European governments can work
together on defense across borders," Mr. Parker said.
He also noted the looming shortage of engineers in the U.K. to
meet industrial demand for skills.
Mr Parker, who is also chairman of mining group Anglo American
PLC (AAL.LN), which is confronting strikes at its mines in South
Africa, gave his support to that company's chief executive Cynthia
Carroll. "Cynthia is doing a good job," he said.
-Write to matthew.curtin@dowjones.com
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