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Mergers failure in the European defence technological and industrial base. The case of EADS / BAE systems


  • Pierre BARBAROUX

    () (Centre de Recherche de l'Armée de l'air (CReA))

  • Blandine LAPERCHE

    () (RRI)


This paper deals with the project of a merger between BAE systems and EADS, announced in September 2012 and finally cancelled one month later. It investigates the rationale of the merger project and the reasons that explain its collapse. Our first aim is to assess the importance - usually put forward in the literature - of the pre-merger phase in the success or the failure of a merger project. Our second aim is to put forward the specificities of mergers when defence firms are involved. Using a single case study methodology, we show that the economic rationality of the project was based on industrial complementaries, economic synergies and personal motives. We then investigate the many political divergences, specific to the defence industry, that emerged during the pre-merger phase. Finally, considering the economic and political stakes, we suggest the merger project appeared as too big to succeed.

Suggested Citation

  • Pierre BARBAROUX & Blandine LAPERCHE, 2013. "Mergers failure in the European defence technological and industrial base. The case of EADS / BAE systems," Working Papers 33, Réseau de Recherche sur l’Innovation. / Research Network on Innovation.
  • Handle: RePEc:rii:rridoc:33

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    References listed on IDEAS

    1. Pierre Barbaroux, 2011. "How do organisations manage to develop collaborative innovation? The case of the tactical strike and reconnaissance aircraft (TSR-2)," Journal of Innovation Economics, De Boeck Université, vol. 0(1), pages 161-179.
    2. Schmidt, Sascha & Rühli, Edwin, 2002. "Prior Strategy Processes as a Key to Understanding Mega-mergers:: The Novartis Case," European Management Journal, Elsevier, vol. 20(3), pages 223-234, June.
    3. Dimitri Uzunidis & Michel Alexandre Bailly, 2005. "Politiques de recherche et innovation militaire : Schumpeter versus Smith aux Etats-Unis et en Europe," Innovations, De Boeck Université, vol. 21(1), pages 43-80.
    4. Epstein, Marc J., 2005. "The determinants and evaluation of merger success," Business Horizons, Elsevier, vol. 48(1), pages 37-46.
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    More about this item


    Merger; EADS; BAE Systems; Defence; European Defence Technological and Industrial Base (EDTIB);

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L64 - Industrial Organization - - Industry Studies: Manufacturing - - - Other Machinery; Business Equipment; Armaments
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance


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