What now for the proposed BAE-EADS deal? What does the united Franco-German position mean for the BAE-EADS deal? With the three principal governments, the UK, France and Germany, having established their opening positions, the deal is gaining momentum and edging closer to a conclusion. But France and Germany's stance, especially on the amount of influence they want to retain in the new company, is not yet aligned with that of the UK or the executives of EADS and BAE Systems, and thus the final outcome remains unknown. IN Industrials What are the red lines? BAE, EADS and the UK government do not want the new company to be too heavily influenced by Paris and Berlin. Interestingly, nor does Berlin. However, as long as Paris insists on maintaining a large shareholding and a degree of power over the new company, so will Germany, officials in Berlin have said. The US government is also less likely to open its lucrative defence sector to a company owned and influenced by foreign governments, a move that would prompt BAE to walk away. Secondarily, several big shareholders are unhappy about the 60/40 EADS/BAE split. But that is dangerous territory since both EADS and BAE say it is the only way to do the deal. Other conditions include employment guarantees, locations of headquarters, investment in crucial technology and, most importantly, national security. However, these are hurdles officials believe they can overcome. What about the October 10 deadline? The October 10 firm offer deadline set by the UK's Takeover Panel can be extended easily and many believe it will be. Nevertheless, EADS chief executive Tom Enders is anxious to maintain the momentum. Perhaps even before that date the companies hope to be able to give further details, such as board composition, that would signal further progress. What happens next? Negotiations between all three governments and the companies need to sort out where compromises can be made, before the companies can give shareholders further information to win their approval for the deal. But even after the Europeans agree, it will take at least another 75 days for the US, BAE's biggest customer, to decide whether the deal contravenes its national security.