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Europe’s Non-Deal of the Century

BRUSSELS – As Europe picks over the ruins of the mega-merger that would have created a world-beating new aerospace and defense giant, questions are being asked about the inglorious role that the European Union played in the fiasco. The European Commission’s failure to champion the $50 billion merger of the Franco-German European Aeronautic Defence and Space Company (EADS), owner of Airbus, and the United Kingdom’s BAE Systems is being seen as a crucial factor in the deal’s collapse.

The integration of the two high-tech aviation and avionics leaders had looked like an EU-inspired blueprint for industrial success. For several years, EU leaders have been urging the consolidation of Europe’s defense industries, so the proposed deal – which originated in the corporate boardrooms of EADS and BAE Systems – looked like an answer to their calls. Yet both the Commission and the European Parliament kept silent and withheld the political support that might have ensured that the deal went through.