Boeing wants BAE-EADS merger scrutinized

By Jeremy Herb - 09/20/12 10:27 AM ET

Boeing’s chief defense official thinks the proposed merger between BAE Systems and EADS needs careful scrutiny from government regulators over potential issues with both national security as well as the defense industry.

Dennis Muilenburg, head of Boeing’s defense operations, told Reuters on Wednesday that the merger had “national security, industrial questions” that would have to be dealt with.

“This is a serious matter that needs to be scrutinized," Muilenburg said.

He added that it was difficult to comment further on the potential merger at this point until more details on the deal were released.

A merger between BAE Systems and EADS, two European companies, would create one of the largest defense companies in the world, and could signal the start of a new round of consolidation within the industry.

Industry leaders have warned that budget cuts within the Pentagon would set off another round of consolidation among defense companies both big and small.

The BAE-EADS merger is still not yet finalized, but the companies are already gearing up for the fight in Washington. BAE has hired two teams of lobbyists to help with the merger, according to lobbying disclosure records.