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MILPLEX
Berlin: 'Golden share' an option for EADS

disclaimer: image is for illustration purposes only
by Staff Writers
Berlin (UPI) Feb 23, 2011
A so-called golden share solution is an option for Germany to keep its influence in European Aeronautic Defense and Space Co. amid a decision by Daimler, a major German shareholder, to sell its stocks in the European defense giant.

A high-level meeting involving German Chancellor Angela Merkel, Finance Minister Wolfgang Schaeuble, Foreign Minister Guido Westerwelle and Economy Minister Rainer Bruederle came to no conclusion how to keep Germany's influence in the parent of plane maker Airbus.

However, Bruederle was quoted as saying by The Wall Street Journal after the meeting that a golden share solution, which would preserve Germany's influence in EADS independently of actual shareholding, was "one of multiple options" discussed.

The meeting was called amid reports that French media company Lagardere and German automobile maker Daimler -- EADS' biggest shareholders -- aim to offload their stakes.

Daimler owns 15 percent in EADS and holds one-fifth of the voting rights through assets of German banks and insurers; France also controls one-fifth of the voting rights, with the French government owning 15 percent, and Lagardere holding another 7.5 percent. Both Paris and Berlin aim to keep this balance of influence intact, observers say.

In a bid to convince Daimler to stay on board, the German government is mulling to introduce a cash bonus for electric cars, a step recently demanded by Daimler Chief Executive Officer Dieter Zetsche, news magazine Der Spiegel reports in its latest edition.

As an emergency strategy, Berlin has reportedly approached other German companies about investing in EADS, should Daimler load off its stake.

"There are already negotiations with different investors, including German subcontractors of EADS," German business daily Handelsblatt recently quoted an unnamed German government source as saying. So far, however, no firm has come forward.

EADS has been under fire over the past months for ballooning costs related to its defense industry projects.

The company's A400M military transport plane program was only saved when its European partner nations agreed to provide a $4.6 billion bailout in November.

The A400M program was originally to cost $27 billion but, according to a recent study, final costs could rise to $44 billion. The program is three to four years behind schedule.

Seven nations have ordered the A400M military transport aircraft from EADS daughter Airbus but most of them, including Germany and Britain, have scaled back orders due to budget pressures and because the plane has become more expensive than anticipated.

The company is also in a fierce competition with U.S. arch-rival Boeing to outfit the U.S. Air Force with 179 in-flight refueling tankers. The contract, which is to be awarded in the coming weeks, is worth an estimated $35 billion to $40 billion.



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