BAE and EADS say talks collapse

LONDON, Oct 10 (Reuters) - Talks on a $45 billion merger ofEADS and BAE Systems collapsed on Wednesdaywhen the governments of France, Germany and Britain failed toreach agreement over a deal to create the world's largestaerospace and arms group.

Britain's BAE and the Franco-German EADS had been workingtowards a 1600 GMT deadline to either walk away from the talksor seek an extension.

In a statement, BAE said it had become clear that theinterests of the governments could not be adequately reconciledwith each other or with the objectives that BAE and EADSestablished for the merger.

"BAE Systems and EADS have therefore decided it is in thebest interests of their companies and shareholders to terminatethe discussions and to continue to focus on delivering theirrespective strategies," it said.

(Reporting by Kate Holton; editing by Jason Neely)

((kate.holton@thomsonreuters.com; 0044 207 542 8560;))