BAE Systems in merger talks with EADS
UK defence contractor BAE Systems is in talks with European aerospace firm and rival EADS over a possible €38billion (£30.4bn) merger.
If successful, the two companies will have combined sales of £60bn and employ 220,000 people worldwide. They will also be the main supplier of Europe's military efforts and own the world's largest aircraft manufacturer, Airbus.
In a statement, BAE said: "The potential combination would create a world class international aerospace, defence and security group with substantial centres of manufacturing and technology excellence in France, Germany, Spain, the UK and the USA."
BAE Systems and EADS have a long history of collaboration and are currently partners in a number of important projects, including the Eurofighter and MBDA joint ventures. Combined, they would be the largest industrial employer in Britain and the second biggest aerospace company in the world after Boeing.
