The firms faced a 5 p.m. deadline Wednesday to decide on a way forward in negotiations, which likely would have involved a request to ask the U.K. government for an extension, according to the report.
Robert Peston, BBC’s business editor, told the website the decision to end the talks does not necessarily mean future talks cannot take place between the companies’ management.
In a statement from BAE and EADS published by the Daily Telegraph, the companies said they agreed on principal terms of the merger including the legal and management structures of a combined firm.
However, the companies said they ended the talks after it became “clear that the interests of the parties’ government stakeholders cannot be adequately reconciled with each other or with the objectives that BAE Systems and EADS established for the merger.”
Our previous BAE-EADS coverage