U.K. defense contractor BAE Systems PLC and European aerospace company EADS NV announced Wednesday that they are in talks about combining their businesses.

The deal would create a global aerospace and defense giant in a sector facing challenges and uncertainties amid cuts to government defense budgets in Europe and the United States.

The merged companies would have combined sales of more than $90.3 billion and more than 220,000 employees.

EADS is already one of Europe’s biggest companies, parent to plane-maker Airbus, helicopter maker Eurocopter, satellite builder Astrium and defense electronics contractor Cassidian.

Airbus and EADS have long been rivals to U.S.-based Boeing Co. in civil and defense aviation.

The proposed deal is a clear shot at catching up to Boeing’s defense business – and perhaps passing it.

The U.S. and European firms have fought ruthlessly in the courts over government subsidies and competed for years for a huge contract to build new aerial refueling tankers for the U.S. Air Force, a contract Boeing finally won.

Boeing’s defense and space business had revenue last year of almost $32 billion, from selling Chinook helicopters and F-18 fighter jets to the U.S. and other nations.

Drought fails to hurt value of farmland

The worst drought in decades doesn’t appear to be affecting Indiana’s farmland values.

Purdue University says its June survey shows a statewide increase in farmland value ranging from 14 percent to 18 percent, depending on land quality, since last year’s survey

Purdue says cash rents have increased about 13 percent to 15 percent.

It says the average value of bare cropland ranges from $5,000 an acre for poor-quality land to $7,700 an acre for top-quality land.

Purdue Extension agricultural economist Craig Dobbins cites “robust” net farm incomes, favorable interest rates, strong demand and a limited supply of farmland for sale for the increases.

Precision Laser gets Navy contract work

Precision Laser Services Inc. in Fort Wayne is one of eight companies in Indiana that will be awarded contract work for the Navy with a combined cumulative value of $10 million, the U.S. Department of Defense announced Wednesday.

The contracts are for the purchase of Crew Served Weapon Mounting Systems in support of Naval Air Systems Command, V-22 Aircraft Survivability integrated product team.

Precision Laser Services, a parts manufacturing company, focuses on metal fabricating and computer numerical control machining.

The new contract work is expected to be completed by September 2017.

Home permits slip in Allen, with caveat

The Home Builders Association of Fort Wayne on Wednesday said there were 69 Allen County residential construction requests in August, compared with 174 permits the same month a year ago.

Year-to-date figures showed a 9 percent decline at 476 permits. The average sale price in August was $240,514, compared with $136,677 in August 2011.

Home Builders Association officials noted last August had more permits requested because of two housing developments.