11 Oct 2012 By Graham Ruddick - telegraph.co.uk
The Italian defence company Finmeccanica could look to take advantage of the collapse of merger talks between BAE Systems and EADS by seeking its own industry-shaping deal.
Finmeccanica is Europe’s third biggest defence company and owns British helicopter-maker AgustaWestland.
However, it has been rocked by a corruption probe and the economic problems facing Italy.
Giampaolo Di Paola, the Italian defence minister, said that Finmeccanica could look to form its own defence and aerospace alliance in Europe.
Mr Di Paola said Finmeccanica management and the Italian government plan to study a number of potential opportunities. Analysts have suggested the company could merge with French technology group Thales.
“I would like to see these evaluations carried out very rapidly,” he said.
The comments highlight the potential repercussions of the failure of BAE and EADS to win government support for their proposed £30bn merger.
The deal would have formed the biggest aerospace and defence company in the world, giving BAE and EADS the firepower to win more contracts around the world.
Defence analysts still believe the European industry is ripe for further consolidation because of shrinking spending by governments.
For example, BAE, EADS and Finmeccanica already work together on the Eurofighter Typhoon fighter jet, each owning a third of the project, while BAE is developing unmanned aircraft with French company Dassault.
The failure of BAE and EADS to create a European aerospace and defence giant is also set to benefit Boeing.
BAE and EADS, which owns Airbus, believed the enlarged company would have been able to compete more efficiently against Boeing in the civil aerospace market and for US defence contracts.
The continuing tensions between Europe and the US were in evidence again on Thursday. The European Commission accused the US of ignoring a World Trade Organisation ruling to stop subsidies to Boeing and asked for a new investigation.
“It is now clear for the European Union that the United States has not only failed to properly implement the decision of the WTO but it has even provided new subsidies to Boeing,” the EC said in a statement.
“The US claimed to have removed [the subsidies], but provided no detailed evidence to support its claims.”