FT, General Dynamics, US defence group, has walked away from a transatlantic merger with BAE Systems after exploratory discussions with its British rival, people close to the talks said.
BAE has acknowledged talking to all five prime US defence contractors about a potential merger but the discussions with General Dynamics were the most advanced, and GD's decision to drop out returns BAE's quest for a transatlantic merger back to square one.
BAE would say only that it remained committed to expansion in the US – source of almost a quarter of its revenues – through continued internal growth or a large merger.
An official said: “Our basic position for some time has been: if there is to be further consolidation in the industry, we want to be part of it.” General Dynamics would not comment.
The decision to end talks followed a visit to London earlier this month by Nicholas Chabraja, GD chief executive. GD is said to have shown interest in BAE's profitable and fast-growing North American operations – high-technology defence systems and electronics businesses acquired from Lockheed three years ago in two deals totalling $2.2bn (
