VIENNA | Wed Jan 2, 2013 7:36am EST

VIENNA (Reuters) - T-Mobile Austria confirmed it had filed an appeal against the allocation of radio frequencies that will result from Hutchison Whampoa's takeover of Orange Austria, in a move that could derail the 1.3 billion euro ($1.7 billion) deal.

A source familiar with the matter had told Reuters last month that the Deutsche Telekom unit planned the appeal over fears it will be at a disadvantage to rivals who will have a head start of up to a year in building next-generation LTE networks.

The ability to build an LTE network, which will offer data speeds up to 10 times those now available, will be a key competitive advantage in Austria's hard-fought telecoms market.

The country's four operators are engaged in a price war as they fight over a population of just 8.4 million, with all-inclusive, no-strings offers available for as little as 7 euros per month.

T-Mobile said on Wednesday it had lodged an appeal on December 31 with Austria's higher administrative court against the decision of the country's telecom control commission, the TKK, for the transfer of frequencies that will accompany the merger.

It said it had asked for the transfer to be put on hold while its legal case is being heard. It said it expected the court to decide within days on whether to grant an injunction in the case, which it thought could last until March or April.

A court spokesman said the court had not yet received the appeal.

($1 = 0.7585 euros)

(Reporting by Angelika Gruber and Michael Shields; Editing by David Holmes)

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Visitors talk near the welcome desk of the EADS booth at the ILA Berlin Air Show in Selchow near Schoenefeld south of Berlin on September 13, 2012.

PARIS/BRUSSELS | Tue Oct 9, 2012 8:04am EDT

PARIS/BRUSSELS (Reuters) - The boards of EADS and BAE Systems prepared to weigh the results of weeks of tough political negotiations over a $45 billion merger on Tuesday with momentum building for an extension to a Wednesday deadline for the deal.

Several sources briefed on the negotiations said France and Britain had narrowed differences over the wording of key guarantees on state shareholdings, raising the prospect that the companies will buy more time to complete the complex deal.

"There has been some progress," a source close to the talks said, asking not to be identified.

But a French government source said the country had not changed its official opposition to a 10 percent cap on its future shareholding in the group, which would be the world's largest aerospace and arms conglomerate with 220,000 employees.

Differences between Britain, France and Germany over state control, jobs and investment have threatened to derail the talks, which have also drawn criticism from a number of investors.

The companies say they cannot spell out the full benefits of the merger before completing negotiations over the shape of the company's capital and possible guarantees on investment.

EADS Chief Executive Tom Enders and BAE Systems Chief Executive Ian King were due to review the talks with their boards and make a decision on the merger, on which the two managers have staked their careers and industrial ambitions.

"Ian King and Tom Enders will discuss the situation later today and then decide, jointly with the respective company Boards, the way forward," EADS said in an emailed statement.

The companies have insisted they will only request an extension to the October 10 deadline set by UK regulators if there is meaningful progress at government level.

Britain and France have the power to veto the deal, which must also be approved by the United States and overcome political objections in Germany.

UNIONS ON STAND-BY

Core EADS shareholders Lagardere, the French media firm, and German car firm Daimler also have the right to veto a deal. Both have expressed unease about the terms but are not participating in board discussions to prevent a conflict of interest, according to a person familiar with the talks.

EADS has put its unions on stand-by for briefings on a possible deal in either one week or two weeks, union officials said, suggesting the companies would seek a far shorter extension that the maximum allowed 28 days. A scheduled European works council went ahead on Tuesday with no managers present.

British Defense Secretary Philip Hammond said he hoped to meet his French, German and U.S. counterparts to discuss the proposed merger on the sidelines of a NATO meeting.

"We always knew that there was a crunch point this Wednesday and the company has to decide today whether it's going to ask the stock exchange for an extension of time or not," Hammond told reporters in Brussels.

(Additional reporting by Gernot Heller, Mathias Blamont, Sophie Sassard, Paul Sandle, Chris Vellacott, Arno Schuetze, Elizabeth Pineau, editing by Peter Millership)

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A BAE Systems sign is seen outside the company's Warton site near Preston, northern England, in this file picture taken October 1, 2009.

BIRMINGHAM, England | Sun Oct 7, 2012 9:27am EDT

BIRMINGHAM, England (Reuters) - The proposed $45 billion merger between EADS and BAE Systems must ensure British security and jobs are preserved, finance minister George Osborne said on Sunday, just three days before a deadline for detailing the deal.

Tensions over the supermerger have spilled into the open in recent days as France, Britain and Germany jockey over the role of the state in what would be the world's largest aerospace and arms group.

"Our approach to this has been to make it very clear that our priorities are of course the national security of the United Kingdom, second: jobs and investment in the UK," finance minister George Osborne told Sky television.

"Those are the tests against which we are judging the proposal brought to us by these two companies," Osborne said.

EADS and BAE announced plans for a merger last month, but their efforts have become snagged on differences over control between France and Germany, while there are also political concerns about jobs.

British Defence Secretary Philip Hammond said Britain would veto the deal if its "red line" conditions were not met.

The merged aerospace-defence group had to be free from the control of any one government, he told BBC radio.

"It is not necessary to have no French or German government interest in the company. It is necessary to reduce that stake below the level at which it can control or direct the way the company acts," Hammond said.

EADS is controlled by a pact between the French state and two core industrial shareholders, Lagardere and German carmaker Daimler. The trio collectively own 45 percent.

France wants to keep a stake but will not rule out adding more, while Germany wants to match France's role.

Britain's stake in BAE Systems is limited to a "golden share" that gives it the power of veto over the merger.

A person familiar with the negotiations said one of the points in dispute was where the new group would be based.

The German government would like an important part of the company, or indeed possibly its headquarters, to be based in Germany, the source said, adding: "It's like a round of collective bargaining".

Time is running out before a UK regulatory deadline of October 10 for a blueprint of the deal, which affects national security interests on both sides of the Atlantic.

(Reporting by Guy Faulconbridge, additional Reporting by Gernot Heller and Tim Castle, Editing by Matt Falloon and Mark Potter and Ron Askew.)

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1 of 5. A BAE Systems sign is seen outside the company's Warton site near Preston, northern England, in this file picture taken October 1, 2009.

PARIS | Thu Sep 27, 2012 5:58pm EDT

PARIS (Reuters) - Europe's EADS (EAD.PA) rejected calls on Thursday to allow extra time for negotiations over a $45 billion merger with BAE Systems (BAES.L), as brinkmanship looked set to play a key role in politically complex plans to create a new defense giant.

Fabrice Bregier, head of the Airbus planemaker unit and part of the inner circle running Franco-German-Spanish EADS, was quoted as saying it was crucial to stick to the date set by UK regulators under rules designed to protect investors.

"The importance is that opinions converge. The October 10 deadline may seem soon but it is absolutely necessary given the environment," Bregier told the French daily Les Echos in an interview to be published on Friday.

EADS (EAD.PA) and BAE are in talks to create what would be the world's largest defense company. But their efforts have become snagged on differences over control between France and Germany while there are also political concerns about jobs.

German Defence Minister Thomas de Maiziere joined France in pressing the companies to seek an extension of the UK deadline in order to give politicians more room to bridge differences.

"Perhaps we need more time. It depends on the answers for our questions and so I think we need more time," de Maiziere told reporters at a meeting in Cyprus.

France and Germany want to safeguard their influence over EADS while special arrangements will be needed to ringfence sensitive operations, including work BAE does in the United States and on Britain's nuclear submarines.

In the past two weeks, investors uncertain about the deal have stripped 4 billion euros from the value of EADS, illustrating the risk Chief Executive Tom Enders could face if he agrees to expose the stock to a further month of negotiation.

BAE shares have also shed their initial gains and analysts warn they may struggle to carry investors with them beyond October 10 if the talks show no signs of progress.

Yet with two weeks left, EADS and BAE have little incentive to seek an extension to the deadline.

Softening the deadline would ease pressure on Europe's politicians to come to an agreement acceptable to the companies while placating U.S. and UK fears of political interference.

For these reasons, experts say a bid for an immediate extension is unlikely unless there is progress. But if there is stalemate running up to the deadline, leaders of both companies could play hardball and decide to abandon the plan.

"It's normal that different points of view are expressed. Especially in an operation where states have strategic interests to preserve," Bregier told Les Echos.

"This kind of operation requires rapid decisions and it's not EADS or BAE management pushing, it's the markets and the clients, who want to know what the future of the group will be," he said adding that the current merger plan included guarantees to the United States covering its security concerns.

INFLUENCE AND TRADE-OFFS

The merger to create the world's biggest defense and aerospace company would dilute the influence of the French, German and Spanish governments in the company, prompting negotiations over their roles in the future.

German reservations include how to safeguard jobs and protect the merged firm from any future hostile takeover, a government document obtained by Reuters on Monday showed.

On Wednesday, a French government source said France would want to retain certain rights, as well.

EADS is standing firm, reiterating its "intention and current expectation" to provide further clarity by that date.

Technically, extensions to the UK stock market deadline are relatively simple and are usually granted, lawyers say.

Yet in classic European negotiating style, as seen on issues from farm subsidies to national bailouts, talks generally go down to the wire.

Raising the threat of a missed deadline, or demanding it be kept, is a tried and tested tactic in the brinkmanship so often seen among the 27 nations of the European Union.

De Maiziere called talks with his British and French counterparts on Wednesday evening "constructive".

"This is a complex situation, there are a lot of questions and conditions, nothing has (been) decided yet ... We will keep in contact," he said.

European governments all face severe spending pressures, but a stand-off between France and Germany over control of EADS is seen as the bigger roadblock, rekindling a climate of mistrust which set in during management rows from 2005 onwards.

France holds a 15 percent stake in EADS and wants to retain its right to influence group strategy. Spain owns 5 percent.

Germany is not a direct shareholder but sees the transaction as a chance to enlarge its influence. At the same time, EADS and BAE are pressing for less political influence.

Airbus's Bregier said he did not see the issue of German state participation being an issue in the talks and did not see any reason why measures could not be taken to ensure a balance with France, whose government would end up with a 9 percent share in the new group as plans stand today.

Signs of discord first emerged at the weekend when Reuters reported that France appeared to rebuff German proposals for a common position [ID:nL5E8KLN1G].

EADS and BAE have said they will offer the governments of France, Germany and Britain a "special share" in the new company, allowing them to block any future hostile takeover, but are determined to prevent any meddling in management decisions.

(Additional reporting by Michele Kambas, Adrian Croft, Rhys Jones, Gernot Heller, Mark John, Catherine Bremer; editing by Jason Neely, Bernard Orr)

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