BAE moves to reassure customers

In a letter published in national newspapers, BAE chairman Dick Olver and chief executive Ian King said the defence giant did not “regret” the failed bid, which would have created a company with combined sales of £60bn.

The decision to ditch the proposal has left many fearful over BAE job security, while others believe the FTSE 100 group is now more vulnerable to a takeover bid. But in their joint notice, Mr Olver and Mr King said they were confident the company can make progress and “prosper in the future”.

After days of political wrangling, the two companies were forced to scrap the plans after German opposition scuppered the £28bn deal. The tie-up would have improved BAE’s exposure to commercial markets, as EADS is an Airbus aircraft manufacturer, in a climate when public defence spending is declining. BAE reported a 14 per cent fall in sales last year as military spending in the US and UK was cut.

In the letter, Mr Olver and Mr King said that the merger would have created “a business that was even better than the sum of its parts”. It published as BAE released an update reassuring that the UK defence environment “remains stable” but warned there was uncertainty surrounding the future of US spending.

BAE employs 900 people at Brough and operates a training academy at Doncaster airport.