David Cummings, head of equities at Standard Life Investments, which owns just under 1 per cent of BAE, also hit out at the British company’s lack of communication with big shareholders on the deal.
He said: “We’re in the sceptical camp at the moment. I think it is a difficult deal as you’ve got US concerns over defence technology leakage and you’ve got political issues – not just Germany and France but also the UK.”
The merger would see EADS hold 60 per cent and BAE 40 per cent of the new company. But there are also plans to issue “golden shares” in the new entity to the UK, French and German governments to give them the right to block any future attempt to take over the combined group.
It is thought this might be blocked by the European Commission, however, as the new company would only be 50 per cent defence, where golden shares are common. The other half would be focused on civil aerospace, where they are not.
Speaking on Radio 4’s Today programme, Cummings added: “There’s golden shares all over the place, so we’re relatively sceptical. Also, BAE have been shy in communicating the rationale for the deal to shareholders – it’s all very quiet out there.”
Ratings agency Moody’s yesterday said that the BAE/EADS tie-up could trigger consolidation in the defence industry.