Video Related To: Make-or-break deadline looms for EADS-BAE Systems merger

www.euronews.com EADS, the parent company of Airbus, and Britain's BAE Systems have confirmed that they have been in talks since June about a merger. That would create an aerospace and defence giant bigger than US rival Boeing in sales and that would be better able to cope with defence spending cutbacks in Europe and the United States. However, investors questioned the rationale of a tie-up and EADS' shares tumbling as much as 11 percent on Thursday, adding to the previous day's fall and erasing more than half of the company's gains made this year. EADS stock, which earlier this week was up nearly 30 percent since the beginning of the year, has plummeted as much as 16 percent since the merger talks were unveiled on Wednesday, wiping about 3.8 billion euros off its market value. Shares in BAE were down 6.4 percent on Thursday, surrendering more than half of the gains made since the merger talks were revealed on Wednesday afternoon. There are still many hurdles to be cleared but sources close to the talks said the US government is not likely to block it. A combined company would be worth around 37 billion euros. The current workforce of the two is 220000. Sales last year for EADS and BAE together totalled 72 billion euros compared with Boeing's 53.2 billion. Boeing chief executive Jim McNerney said the Chicago-based aerospace leader was not fundamentally threatened by such a merger. McNerney said BAE and EADS are following the same policy as Boeing in seeking to balance <b>...</b>