Germany vetoed BAE, EADS deal: Osborne

$45-billion merger plan collapsed on Wednesday

Britain's finance minister George Osborne insists Germany vetoed a merger bid by British arms maker BAE Systems and European aerospace giant EADS, British newspapers reported on Saturday.

Although observers agree Germany this week torpedoed talks to create the world's biggest aerospace and defence group, the comments by Chancellor of the Exchequer Osborne were the strongest yet by a British minister on the matter.

They also contrast with comments by Germany's economy minister Philipp Roesler, who rejected accusations that Germany should be blamed for the botched tie-up attempt.

"We have been a bit disappointed, primarily by Germany's attitude, which in effect vetoed the deal," Osborne was quoted as saying in British newspapers after briefing reporters on the sidelines of an IMF meeting taking place in Tokyo.

"I would like to have seen if we could have progressed those talks, even if that still meant the deal did not go ahead," Osborne said, according to The Times.

"It is not that we (Britain) were committed to the deal -- we just thought it worth discussing."

The $45-billion (34.7-billion-euro) merger plan collapsed on Wednesday, leading the chief executive of EADS, Tom Enders, to express surprise at the level of resistance in Germany to the tie-up.

Analysts said Germany feared being sidelined after any such deal and was worried that jobs and factories could go with only one year until a general election in Europe's top economy.

The merger talks had been reliant on agreement between the British, French and German governments. EADS is dominated by key stakeholders France and Germany, while Britain has a "golden share" in BAE that allowed it to block the tie-up.

The two companies had hoped to create a global champion in the fields of civil and defence aviation, that would compete more effectively with fierce US rival Boeing at a time of deep government cuts to defence spending.

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