Member Article

BAE-EADS merger falls through

Last night’s third quarter earnings release from Alcoa, the largest aluminium producer in the US, caused jitters in equity markets today as it pointed towards slowing Chinese demand for the industrial metal. The start to this week has turned out to be a confluence of disappointing economic news, with the IMF and world bank both cutting their outlook for the global economy. Whilst the FTSE 100 slipped 0.6% to finish the day at 5776, banking stocks were in fact some of the best performers on the index. Lloyds and RBS added 4% and 2.1% respectively following a Financial Times article that suggested the UK’s City regulator had relaxed capital and liquidity rules for UK banks, in an attempt to encourage lending to aid the struggling domestic economy. Elsewhere, the much publicised merger between the London listed BAE Systems and the European EADS was called off today, as the UK, French and German governments couldn’t find common ground on their stakes in proposed new entity. Both companies have suggested that the political gridlock insurmountable in the merger progression, but it is likely scrutiny will be placed on the CEO’s of both groups who pushed hard for the deal. Shares in BAE fell 1.4% today at 320.9p.

This was posted in Bdaily's Members' News section by James .