UK says prepared to veto EADS-BAE merger

BIRMINGHAM (REUTERS) - Britain will block the proposed S$55 billion merger between EADS and BAE Systems if key "red line" priorities are not met, defence minister Philip Hammond said on Sunday, just three days before a deadline for detailing the deal.

EADS and BAE announced plans for a merger last month, but their efforts have become snagged on differences over control between France and Germany, while there are also political concerns about jobs.

"We have made very clear that we do have red lines around the BAE-EADS merger and that if they can't be satisfied then we will use our special share to veto the deal," Mr Hammond told BBC radio, referring to Britain's so-called "golden share" in BAE that gives it the power to block a transaction involving the company.

Tensions over the supermerger have spilled into the open in recent days as France, Britain and Germany jockey over the role of the state in what would be the world's largest aerospace and arms group.