MILAN (Reuters) - A tie-up between EADS and BAE Systems would limit Finmeccanica’s ability to compete in Europe and leave the Italian aerospace and defence group with French aerospace and defence electronics specialist Thales as the only merger option left, Mediobanca analysts said on Thursday.
BAE Systems and EADS said on Wednesday they were in talks to create an industry leader that would overtake U.S. rival Boeing in sales and contend with cutbacks in defence spending in Europe and the United States.
“The news is negative for Finmeccanica because it signals a dramatic situation in expectations for defence budgets ... and would make it very difficult for Finmeccanica to get orders in France, UK, Germany,” Mediobanca said in a note on Thursday. “In terms of potential M&A Finmeccanica has only one option left: Thales.”
Reporting By Danilo Masoni; Editing by Greg Mahlich