Cable's views on BAE merger may not matter

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The Independent Online

To listen to BAE Systems' top brass you'd think that the British Government was the least of the problems with their increasingly tortuous attempts to secure a merger with Eads. Oh, the Tory right might bluster a bit, but the company appears confident that, when push comes to shove, this country's politicians will do exactly what they've done on every other occasion that an unpopular deal has created a bit of a fuss and wave the thing through.

At a fringe meeting during the Liberal Democrat conference, Vince Cable, the Business Secretary, said while he couldn't comment directly on BAE's planned merger, his "robust" view was that "I don't worry about foreign ownership". That's like a judge in a burglary trial stating at the outset his "robust view" that he "doesn't worry about people invading other people's homes".

Such a statement from Mr Cable isn't even subtle: it looks very much like the merger is effectively a done deal from the British perspective.

That ought to be something for the Defence Select Committee to get its teeth into, having taken the unusual step of announcing an inquiry midway through a commercial deal.

Mr Cable has form for putting his foot in his mouth. Remember the comments about being "at war" with the Murdochs? They led to his being relieved of the responsibility for taking the "quasi-judicial" decision on whether their proposed takeover of Sky should be allowed to go ahead (before the phone hacking affair).

A very silly thing to say for a man in his position, but luckily for Mr Cable this time, his comments are likely to be an irrelevance. Eads has made it clear it will walk away from a deal if the merged group is subject to state meddling (so has BAE). That means France and Germany giving up their overt influence over the company in the form of their seats on the board.

The latter's economics ministry was revealed in leaked papers yesterday to have expressed "grave doubts" about surrendering its influence over the merged group. It also believes Eads shareholders should get 70 per cent, not the 60 per cent on the table.

And we've not even got started with the Americans before we get to the Takeover Panel's 10 October deadline for the sides to spell out their terms.

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