British Aerospace and GEC–Marconi

Abstract

The planned merger between British Aerospace and Marconi would create the world's third-largest arms firm in terms of market capitalisation and sales. The amalgamation has, however, caused controversy in continental Europe and even in the UK. European leaders, including UK Prime Minister Tony Blair, had been hoping for a series of mergers that would lead to a new European Aerospace and Defence Company capable of competing on equal terms with US companies. The British merger is seen as a blow to these hopes, and even to the prospects for a common European security policy. On the other hand, its supporters argue that it makes economic sense, and that it will galvanise the state-dominated and inefficient European military-industrial sector.