Shares in defence/aerospace giants fall back after rise following confirmation of merger talks

LONDON – Shares in aerospace and defence contractors BAE Systems and EADS have fallen sharply a day after they surged when the companies said they were talking about a merger.

Shares in British-based BAE were down as much as 9 per cent in early trading in London on Thursday, after gaining 10.6 per cent on Wednesday after the news leaked.

EADS shares were down 5.6 per cent at 26.44 euros in morning trading, leaving the stock back at the level of Tuesday’s close and more than 12 per cent lower than last Friday.

The deal would create a global aerospace and defence giant with combined sales of more than €70 billion ($90.3 billion) and more than 220,000 employees, but also with a complex structure split among several countries including the U.K., France, Germany and the Netherlands.