Boeing says Bush would back BAE merger

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The Independent Online

The Bush administration would support a transatlantic merger between BAE Systems and Boeing of the US if the companies could make a convincing business case, a senior Boeing executive said yesterday.

Boeing's chief financial officer, Mike Sears, who is widely seen as the favourite to succeed the company's chairman, Phil Condit, said issues of national security could be a bigger hurdle to overcome than anti-trust concerns if the companies tried to merge: "The Bush administration is business orientated, and if bringing together two companies was good for business, I think it would be supportive."

Mr Sears said Boeing had more joint ventures with BAE than any other supplier. Although Boeing was not actively pursuing a merger he added: "Should we ever decide to be a merged company, it will be driven by the ability to deliver shareholder value. If by merging with BAE Systems there was a way to create additional value for their shareholders and ours then there would be an obligation to do it."'

He added that the anti-trust issue was a well-ploughed furrow, whereas the national security implications of such a merger had not been widely examined. The US military has secret programmes to which BAE is not allowed access, even though it now has extensive US interests and is classed as a US company in bidding for defence contracts. "The national security and technical data ... would have to be worked on by both companies," he said.

Meanwhile, Vance Coffman, the chairman of Lockheed Martin, renewed his push for more consolidation across aerospace, calling for the creation of a "single, integrated transatlantic defence marketplace". "This would be a marketplace," he said, "where governments would work together to define harmonised military requirements and seek best value in defence procurement and where companies in Europe and America would co-operate and complete on a global footing."

Also, the European Competition Commissioner, Mario Monti, yesterday attacked political interference in General Electric's proposed $42bn (£29.9bn) purchase of Honeywell International and said he would not be influenced by President Bush's comments. "I deplore attempts to misinform the public and to trigger political intervention," he added.