BAE Systems and EADS who own the Airbus manufacturer group have announced a joint merger to create a £30 billion pan European aerospace company.

The merger would offer increased competition to global defence systems manufactures including American defence giant Boeing.

The merger would see EADS own 60 percent of the business with BAE owning the remaining 40 percent. EADS would also be able to use key BAE connections to new markets including the company’s links to the Pentagon.

The announcement of the merger saw BAE shares rise by 11 percent. In a statement BAE said: "BAE Systems and EADS believe that the potential combination … 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."