The proposed £28 billion sterling merger of defence giants BAE Systems and EADS is off, sources said today.
The merger would have created a defence titan with combined sales of £60 billion and over 220,000 staff, with around 52,000 employees in the UK alone.
There had been reports that the French, German and British governments were at loggerheads over the level of state ownership of any combined firm.
In a statement, BAE said it had become clear that the interests of the governments could not be adequately reconciled with each other or with the objectives that BAE and EADS established for the merger.
"BAE Systems and EADS have therefore decided it is in the best interests of their companies and shareholders to terminate the discussions and to continue to focus on delivering their respective strategies," it said.
