BAE said on Wednesday that it had become clear that the interests of the French, British and German governments could not be adequately reconciled with each other or with the objectives that BAE and EADS established for the merger.
“BAE Systems and EADS have therefore decided it is in the best interests of their companies and shareholders to terminate the discussions and to continue to focus on delivering their respective strategies,” it said.
German Chancellor Angela Merkel had opposed the proposal to combine Airbus passenger airplanes with UK defence contractor BAE. “Merkel is against the deal but has not given reasons,” a source said.
A German government spokesman declined to comment.