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UPDATE 1-Italy says Finmeccanica can seize on EADS-BAE collapse

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* Defence Minister urges swift action

* Aeronautics, defence electronics deals possible

* Shares up 1.1 percent

(Adds comments from industry source, shares)

By Roberto Landucci

ROME, Oct 11 (Reuters) - Finmeccanica must actquickly to seize opportunities arising from the collapse of themerger between defence groups BAE Systems and EADS, Italy's defence minister said on Thursday.

Europe's two biggest aerospace groups will go back to thedrawing board to find new strategies after Germany stymied thecreation of the world's biggest arms and aviation company.

Italy's Finmeccanica, meanwhile, has been presented withvarious opportunities to take advantage of the merger's failure,Giampaolo Di Paola told reporters at the margins of aparliamentary hearing.

The defence minister said that these have to be evaluatedfirst by management and then by the government, adding: "I wouldlike to see these evaluations carried out very rapidly."

Di Paola's comments, which came ahead of a meeting betweenFinmeccanica and the government to discuss possible allianceprospects, boosted shares in the state-owned conglomerate totheir highest level in seven months.

An industry source familiar with the situation said thatFinmeccanica, Europe's third-biggest defence group, could takepart in any cross-border talks for possible alliances inaeronautics, defence electronics and helicopters.

The company, which posted a 2.3 billion euro ($2.97billion)loss last year, would have greater bargaining power insector consolidation talks if it manages to make progress in itscontinuing restructuring and asset disposal plan, the sourceadded.

Chairman Giuseppe Orsi and other Finmeccanica executives areexpected to meet Prime Minister Mario Monti, Di Paola andTreasury Minister Vittorio Grilli on Oct. 16 to talk about theprospect of alliances and development in the aeronautics anddefence sectors.

Finmeccanica, Italy's No. 2 industrial group behind carmaker Fiat , has put on the block its non-core energyand transportation assets and has promised to earn 1 billioneuros from disposals by the end of the year to avoid its creditrating being cut to "junk".

The industry source said that Finmeccanica's experience inbuilding the Eurofighter could make it easier for the group tojoin any European or international partnership for the nextgeneration of fighter aircraft, which could either be a drone ora more traditional fighter plane.

Although its Anglo-Italian AgustaWestland helicopterbusiness is profit-making, Finmeccanica needs to cut costs andrestructure its aeronautics and defence electronics operations -sectors in which greater international cooperation is neededbecause of shrinking budgets.

Analysts have said that Finmeccanica could expandcooperation or even consider a merger with French aerospace anddefence electronics specialist Thales .

Finmeccanica shares were up 1.1 percent at 1040 GMT.($1 = 0.7751 euros)

(Additional reporting by Danilo Masoni; Editing by DavidGoodman)

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Keywords: FINMECCANICA EADS/