A deal to create a European defence and aerospace giant to rival Boeing Co. collapsed Wednesday when BAE Systems and EADS NV called off merger talks in the face of government objections.
The companies said they had "decided to terminate their discussions" over the proposed $45-billion tieup because of conflicting interests between the British, French and German governments. The proposed merger between Britain's BAE and Franco-German EADS, the parent of Airbus, would have created a company with a market value just shy of Boeing's.
But from the start, investors were skeptical about the deal because of the political disagreements. All three governments had to approve for it to go ahead.
