A MAJOR Isle of Wight employer is in discussions about a possible merger.
BAE Systems, which has a maritime services operation partly based in Somerton employing around 270 people, announced today (Wednesday) that it was in talks with aerospace company EADS.
A company spokesperson is reported to have said it was too early to confirm whether there could be job losses.
A statement issued by the company confirming the talks said: "BAE Systems and EADS believe that the potential combination of their two businesses offers the prospect of significant benefits for customers and shareholders of both companies.
"These benefits include cost savings, such as from procurement and sourcing efficiencies available to the enlarged group, and substantial new business opportunities."
According to the statement, the deal could lead to BAE Systems shareholders having a 40 per cent stake in a new, dual listed company.
"It is contemplated that there would be a unified board and management structure with identical boards and executive committees at each of BAE Systems and EADS," the statement said.
The statement added: "BAE Systems and EADS have a long history of collaboration and are currently partners in a number of important projects, including the Eurofighter and MBDA joint ventures.
"The potential combination would create a world class international aerospace, defence and security group with substantial centres of manufacturing and technology excellence in France, Germany, Spain, the UK and the USA.
"BAE Systems and EADS operate highly secure and sensitive defence businesses in the USA, the UK, France, Germany, Spain, Saudi Arabia and Australia, amongst other countries.
"Discussions have therefore been initiated with a range of governments about the implications of the potential transaction.
"Under the transaction structure being discussed between the parties, BAE Systems and EADS envisage that certain of their defence activities would be ring-fenced with governance arrangements appropriate to their strategic and national security importance, particularly in the USA, given the importance of that market to the enlarged group.
"In addition, subject to receiving appropriate shareholder approvals, the parties envisage issuing special shares in BAE Systems and EADS to each of the French, German and UK governments to replace the existing UK government share in BAE Systems and the stakeholder concert party arrangements in EADS."
The Somerton site on the Isle of Wight is one of five in BAE's maritime services division, which employs a total of 3,500 people.
Earlier this year the company announced plans for a £2.8 million investment in the Somerton site to improve facilities.
Any merger would require the approval of both companies' boards.
A decision on whether a merger is to go ahead, should be made by October 10 under rules set by the City Code on Takeovers and Mergers, unless a deadline extension is agreed by the City Takeover Panel. BAE Systems has already said it will apply for an extension if the deal cannot be agreed by October 10.