Heard on the Street

EADS-BAE's Fight for Approval

Oct. 1, 2012 1:51 p.m. ET

Politicians aren't known for giving up control. But if the proposed merger between EADS and BAE Systems is to fly, the French, German and British governments will need to compromise. That is proving difficult. Despite the commercial and strategic benefits to creating a European aerospace and defense giant to rival Boeing, politics may yet derail EADS's and BAE's ambitions.

The two companies need to square a seemingly intractable political circle. France wants a significant stake and influence in the merged company; Germany...

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