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BAE Systems chiefs failed the hubris test. (2012)

“The collapsed attempt of Dick Olver and Ian King, chairman and CEO of BAE Systems, to merge with EADS is “another high-scorer on the hubris index”, writes Ruth Sunderland in the financial website This is Money.

 

Ruth Sunderland,
This is Money, 12 October 2012

The collapsed attempt of Dick Olver and Ian King, chairman and CEO of BAE Systems, to merge with EADS is “another high-scorer on the hubris index”, writes Ruth Sunderland in the financial website This is Money.

“BAE’s top executives were, according to well-placed sources, shocked and bewildered when nemesis struck in the ample form of Angela Merkel, who vetoed the deal. They shouldn’t have been. Frau Merkel is facing a tricky election and is in the middle of the euro meltdown.

“Why on earth did they expect her to coo with delight at the prospect of spending billions of euros of her taxpayers’ money on a stake in a new company? Why should she approve a merger that might put German jobs and industry at risk?

“As the tortuous discussions with governments continued, BAE shareholders were growing fractious at being sidelined. That led the biggest investor, Neil Woodford of Invesco, to issue the most blistering public criticism I have seen from an institutional shareholder in more than two decades of financial journalism. Yet BAE seemed to brush it aside, continuing with its doomed talks with politicians.

“King and Olver also seemed to have discounted another glaring fact: that a string of big deals had already collapsed since the financial crisis, to the embarrassment of the chairmen and chief executives concerned.”

Read the full article here: BAE Systems chiefs failed the hubris test

 

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