European defence firms should merge, France says

Posted on: Jul. 5th, 2006 || Source: today.reuters.com | E-mail Article | Print Article

STRASBOURG, France, July 4 (Reuters) - European defence firms should merge with each other in order to compete against rivals from other continents, French Defence Minister Michele Alliot-Marie said on Tuesday.

Europe's defence companies, whose top players include Britain's BAE Systems (BA.L: Quote, Profile, Research), France's Thales (TCFP.PA: Quote, Profile, Research) and aerospace group EADS (EAD.PA: Quote, Profile, Research), are under pressure to cooperate to share sluggish European spending and compete with larger U.S. firms and other rivals.

"To face up to international competition, our companies should acquire a European dimension. We will only resist Chinese, South Asian or Latin American competition if we have this dimension," Alliot-Marie told the European Parliament's foreign affairs commission.

"So we must actually enable the necessary tie-ups," she added, citing EADS as an example of a successful merged entity.

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