BAE director to leave after collapse of merger

BAE Systems moved to respond to investor anger in the wake of the collapse of its merger with Eads yesterday, saying that the senior independent director Sir Peter Mason is to leave.

That comes just weeks after the defence giant insisted it was "fully supportive" of its directors in the wake of a letter from the largest shareholder, Invesco Perpetual, calling for the ousting of both Sir Peter and BAE's chairman, Dick Olver.

The £28bn BAE/Eads merger was cancelled after political deadlock. Government concerns about the combination of Britain's largest defence contractor and the owner of Airbus could not be overcome, with the UK, French and German administrations unable to agree.

There were immediate calls for a boardroom shake-up, with Mr Olver seen as the most vulnerable. BAE says it will stick with the plan for him to depart in 2014, claiming most shareholders support this stance. Yesterday it said that Sir Peter will also go, at the annual meeting in May.

Nick Rose, a BAE board member for two years and a former chief financial officer of Diageo, will replace Sir Peter and will seek a replacement for Mr Olver.

Mr Olver said: "Sir Peter Mason has made an outstanding contribution to the BAE Systems board. As an engineer and business leader, his deep understanding of the challenges of complex engineering projects and general wise counsel will be greatly missed. All directors would like to record their thanks for the contribution he has made and the diligent and professional manner in which he has discharged his duties as senior independent director."

Sir Peter was paid £94,000 last year for his part-time role.

Ben Wallace, the Conservative MP for Wyre and Preston, who organised a petition against the deal signed by 45 MPs, said the deal should never have been promoted due to the threat of political interference by the French and German governments.

He said last month: "The BAE board should reflect long and hard at what their strategic error could mean for the company's future. If they have put at risk my constituents' jobs and fatally wounded the UK's jewel in the manufacturing crown, then they should consider their position."

BAE shares slipped 5.6p to 300.8p.