EADS and BAE Systems are complementary European titans in the global aerospace industry where the main competitors today are in the United States and tomorrow possibly also in emerging countries such as China and Brazil.

EADS, based in Germany and France, does most of its business in the civil aviation sector which is expected to generate huge demand for airliners for decades.

BAE Systems of Britain specialises in defence equipment, a sector as vital to national security as it is clouded by pressures on national budgets.

Both companies are important as hubs of technological and industrial excellence, and employment, in economies suffering from a perception of industrial decline. And both are important to their national economies as big exporters.

EADS was worth 23.15 billion euros ($29.80 billion) before the announcement on September 12 that EADS and BAE Systems wanted to tie up.

BAE Systems was worth 11.81 billion pounds (14.7 billion euros, $18.92 billion). This gave a joint capitalisation of 37.85 billion euros at that time.

The two companies said that a merged entity would be worth about $45 billion.

Under the proposal, EADS and its shareholders would account for 60 percent of the merged entity and BAE Systems shareholders 40 percent.

France and Germany are believed to each be aiming for a stake of 9.0 percent in a merged entity.

Britain is not interested in a holding of its own, but wants to limit the two other countries to a total stake of no more than 18 percent.

EADS:

A central feature of the structure of the European Aeronautic Defence and Space Company (EADS) is that Germany and France have equal voting rights, each accounting for 22.35 percent of the total.

The French state owns about 15.0 percent and Lagardere about 7.5 percent, but Lagardere provides all the French directors for voting on behalf of this French holding.

The German industrial group Daimler owns 14.85 percent, having transferred an interest of 7.5 percent to a group of core investors including the KfW state bank, making a total of 22.35 percent, but Daimler votes on the board for the whole of this holding.

Spain owns 5.45 percent of EADS. The rest of the company is in private hands via the stock market.

EADS had emerged from a restructuring and merger of French, German and Spanish aerospace firms in 2000.

The deeper origins of its main business Airbus lay in a complex government structure which took account of French and German national interests.

Six years ago EADS ran into serious financial problems arising from delays to its programme for building the A380 superjumbo jet.

These delays revealed deep flaws in management and industrial procedures and the group launched a vast programme to cut costs, to restructure and to diversify its cost base away from dependence on the euro since most aerospace sales are made in dollars.

EADS controls Airbus, by far the main part of its business. Airbus builds airliners and military transport aircraft. EADS also builds satellites and rockets via Astrium, and helicopters via Eurocopter. It also has a defence arm called Cassidian.

Its main competitor is Boeing of the United States.

EADS recently took a big step on Boeing's home ground, saying it would open an assembly plant costing $600 million in Alabama which will produce the first US-built Airbus aircraft by 2016.

The initiative came after Airbus lost a big US Air Force contract for military refuelling tanker aircraft. The contract was awarded to Boeing after a politically charged contest.

The EADS group employs about 133,000 people at more than 170 sites worldwide, and for 2011 reported sales of 49.1 billion euros and a net profit of 1.033 billion euros.

EADS shares were at 29.65 euros immediately before the announcement of talks, and closed on Tuesday at 26.10, a fall of 11.97 percent.

BAE SYSTEMS:

BAE Systems, based in London, is an independent quoted company. The biggest single shareholder is the Invesco Perpetual fund with 13.3 percent.

The British government has a golden share which can prevent any foreigner from holding more than 15 percent of the voting rights.

BAE Systems achieves about 45 percent of its sales in the US market. The group is involved in building missile systems, tanks, torpedoes, submarines and fighter aircraft, and provides equipment for security.

Until 2006, BAE Systems owned 20 percent of Airbus but withdrew to focus on the US market and against a background of long-standing unease at the structure for governance and political influence.

BAE Systems was born in 1999 when British Aerospace bought the British General Electric company.

Its main competitors are the US firms Lockheed Martin, Northrop Grumman and Raytheon.

In the United States, the group is a key supplier for the F-35 Joint Strike Fighter and is also responsible for the Trident nuclear submarine programme.

BAE Systems employs 83,600 people, mainly in Australia, Britain, India, Saudi Arabia and the United States, and reported sales last year of 19.154 billion pounds. Net profit was 1.24 billion pounds.

Immediately before the deal was announced, shares in BAE Systems were being traded at 328.70 pence. At the close of business on Tuesday they stood at 325.40 pence, a decline of 1.0 percent.