EU anti-trust review of BAE-EADS deal may face legal limit

EU regulators, usually responsible for approving Europe-wide takeovers and enforcing the right to do business across the bloc, have been careful about any involvement in the defence industry because of the legal exemption, said Clara Marina O’Donnell, an analyst at the London-based CER.

The military opt-out may also affect EU rules that condemn special rights for government shareholders, known as golden shares, "simply because it’s an area where traditionally governments have been allowed to do what they want," she said. ...A bigger regulatory obstacle to the deal may be the US, which is "sensitive about who is the owner" of defense-equipment suppliers, said O’Donnell. Any requirement for BAE to sell off US businesses would be a challenge because those units are a significant source of its earnings, she said.