Defence giant BAE Systems has confirmed that plans for a £28 billion merger with French rival EADS have been scrapped.
The deal would have created a defence titan with combined sales of £60 billion and more than 220,000 staff, with around 52,000 employees in the UK.
BAE said it had become clear that the interests of government stakeholders – including those in France and Germany – could not be reconciled with each other or with the company's objectives.
Unions believed the link-up would have created a strong company to guarantee jobs in the long-term.
BAE chief executive Ian King said the company was “disappointed” that an agreement could not be reached. He added: “We believe the merger presented a unique opportunity for BAE Systems and EADS to combine two world class and complementary businesses to create a world-leading aerospace, defence and security group.”
But he said that the British business remained "strong and financially robust".
King went on: “We continue to see opportunities across our platforms and services offerings and in the various international markets in which we operate. We remain committed to delivering total shareholder value and look to the future with confidence.”
Meanwhile, Tom Enders, chief executive of EADS, said that he wanted to thank King for his “trust and partnership”.
Enders added: “It is, of course, a pity we didn't succeed but I'm glad we tried. I'm sure there will be other challenges we'll tackle together in the future. EADS will continue on its international growth path and our shareholders can continue to expect profitable growth, excellent liquidity and programme execution based on a strong order book.”