EADS Non-Executive Director John Parker Backs BAE Merger - Report

LONDON--John Parker, one of the U.K.'s most respected industrialists and a non-executive director of European Aeronautic Defence & Space Co. NV (EAD.FR), says the importance of scale in the global defense industry - known for its long lead times - explains why it is important for BAE Systems PLC (BA.LN) to tie up with the Franco-German aero-defense group.

In an interview with the U.K.'s Independent newspaper published Tuesday, Mr. Parker said: "The reality is that aerospace and defence are industries which have a long lead cycle and need to be strong to compete in world markets."

He added, "It's a pity the merger plans were leaked before we could publish the formal offer, as everyone - the press, and the politicians - has tried to write the prospectus before we have had a chance to publish it. Hopefully, we will soon.

"Together, the companies have a stronger future; a stronger balance sheet, a better and more modern governance to be able to compete with companies such as Boeing and new ones emerging in the East".

Merging BAE and EADS would create the world's biggest aero-defense group by sales, ahead of U.S. rivals Boeing Co. (BA) and Lockheed Martin Corp. (LMT).

Negotiations between the U.K., France and Germany on how to preserve some influence over the enlarged company are "a strong outward and visible sign that European governments can work together on defense across borders," Mr. Parker said.

He also noted the looming shortage of engineers in the U.K. to meet industrial demand for skills.

Mr Parker, who is also chairman of mining group Anglo American PLC (AAL.LN), which is confronting strikes at its mines in South Africa, gave his support to that company's chief executive Cynthia Carroll. "Cynthia is doing a good job," he said.

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