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BAE’s US units staying put

WASHINGTON — BAE Systems said it had no plans to divest any US business units as a result of the proposed merger with European aerospace giant Eads.

“We have no plans to divest any of our business in the United States, as it relates to this transaction,” a BAE spokesman told Reuters.

He said the US unit would still operate as a US company and the new combined holding company would be subject to the same security requirements as BAE Systems is today.

Some European analysts have said the deal would have negative US security implications, suggesting that US officials could order BAE to divest some business units that do sensitive work for the US military or intelligence agencies.

But sources close to the case told Reuters earlier this week that US officials were unlikely to block the deal since there is little overlap in the US work of BAE and EADS and both companies already have existing security deals that prevent their foreign-based parent companies from influencing their work on sensitive US government programmes.

The US Defence Department said last Wednesday it would review the merger once it was submitted, but people familiar with the matter said the companies had already held some preliminary conversations with US officials.

On Friday, the BAE spokesman underscored that the current security arrangements would remain in place for the combined company’s US operations, preventing foreign ownership, influence and control.

“It will be staffed by executives of the same nationalities as today and will be ‘ringfenced’ under the terms of a national security agreement to ensure that there is no foreign ownership, influence or control,” said the spokesman.

As a result, there would be no impact on the US company’s ability to provide its products and services, “including those of a sensitive or classified nature, to our US government customers, now or in the future,” he said.

Accordingly, he said, the company had no plans to divest any US businesses or operations as a result of the combination.