France May Cede Aerospatiale in Merger Bid

The French government said it’s prepared to cede control of Aerospatiale, France’s biggest defense company, in a last-ditch attempt to help the company muscle in on a merger between British Aerospace and DaimlerChrysler Aerospace. The government, which has already agreed to cut its stake in Aerospatiale to 48%, may go further if it’s presented with a plan to unite the company with BAe and Dasa, Finance Minister Dominique Strauss-Kahn said. BAe and Dasa have made clear they won’t join forces with state-controlled companies as they discuss a merger that would create the world’s third-largest defense company, with $21 billion in sales. The absence of government control would make it easier for the companies to cut costs by closing plants and sacking workers, analysts said. As a result, the two companies would be better placed to compete with their bigger rivals, Boeing Co. and Lockheed Martin Corp. of the United States.