Subscribe free to our newsletters via your
. Military Space News .




MILPLEX
EADS deal ends state grip, boosts shares and Daimler
by Staff Writers
Paris (AFP) Dec 06, 2012


German auto group Daimler slashed its holdings in aerospace giant EADS on Thursday, but EADS shares still surged higher, hours after France and Germany ended their grip on the boardroom and two months after the collapse of merger talks with BAE Systems.

EADS director for strategy Marwan Lahoud described a share restructuring plan unveiled late on Wednesday and which ends the ability of the French and German governments to effectively control the group, as a "new birth."

The European Aeronautic Defence and Space company (EADS) owns airline maker Airbus which accounts for most of its business, but also builds rocket and missile launchers, satellites, fighter aircraft and helicopters.

Lahoud told the French radio station Europe 1, that from now on "decisions will be taken within the company."

He also said that the chance of a tie-up with the British defence group BAE Systems would not come again but noted that if a similar situation were to arise "I think we would be in a better position to find a solution."

Lahoud nonetheless also said: "We are in the process of reviewing our strategy. At the moment, we do not envisage any kind of acquisition."

The price of EADS shares, which had climbed as prospects for the restructuring increased, shot up by a further 7.97 percent to 29.40 euros on Thursday, above the price at which Daimler sold its shares.

The new level is close to where EADS shares traded before the group revealed on September 12 that it was holding merger talks with BAE Systems, which had caused EADS stock to nose dive.

The ratings agency Moody's said Thursday that it had cut its assessment of EADS debt by one notch from "A2" from "A1" however because the company was less likely to get government backing.

Moody's maintained its stable outlook on EADS debt.

"The rating downgrade reflects lower expectations for potential government support," noted Russell Solomon, Moody's lead analyst for EADS.

Shortly after trading began on Thursday, Daimler said it had halved its holding in EADS, as planned under the restructuring, raising 1.66 billion euros ($2.2 billion).

"Daimler today sold 61.1 million shares in EADS ... The price per share was set at 27.23 euros, which corresponds to the EADS closing price in Paris on Wednesday," Daimler said.

This cut Daimler's stake in EADS to 7.5 percent, and buyers included the German state-owned investment bank KfW, which purchased a stake of 2.76 percent and the Dedalus investor consortium, which acquired 1.9 percent, the statement said.

EADS was created in July 2000 through a merger of German defence group DASA, Aerospatiale-Matra of France, and Spanish group CASA.

Success from failure

--------------------

Under an initial shareholder pact intended to balance national interests, the French state held 15 percent of the group and the French industrial and media group Lagardere 7.5 percent along with the combined voting rights.

Daimler held 15.0 percent, and a consortium of public-private German interests 7.5 percent, all on behalf of the German public interest. A Spanish public holding company holds another 5.45 percent.

Under the new deal, Daimler and Lagardere are to cut back their EADS stakes, leaving German and French state interests each holding 12.0 percent and Spain about 4.0 percent.

The percentage of freely floating EADS shares will jump from 49 percent to more than 70 percent, the group said.

Sources close to French Economy Minister Pierre Moscovici highlighted a clause that would bar any new EADS shareholder from acquiring more than 15 percent.

The ambitious deal with BAE Systems, which would have created a vast group to compete with US rival Boeing, is believed to have failed largely because Germany feared being sidelined, and was worried about the impact on jobs at German aerospace factories.

The British side was concerned that France and Germany would interfere unduly in a merged group, and that this could undermine confidentiality in relationships over US defence contracts.

Under the capital restructuring plan, EADS is to buy and cancel up to 15 percent of its shares.

A portfolio manager at Barclay Bourse, Renaud Murail, explained: "The price is being supported by the outlook for a programme to buy up shares at the beginning of 2013.

"Apart from the fact that EADS has plenty of cash, this programme will compensate for the effect of the arrival on the market of shares held by Daimler and Lagardere which are pulling out."

Brokers at Bank of America - Merrill Lynch upgraded EADS shares to a "buy" recommendation from "sell", commenting that "the influence of the governments has been sharply reduced" and that the company had paid attention to observations from investors and had sought to protect their interests.

Governments are to give up their vetoes on decisions, but Lahoud noted that EADS, given the products it makes, was not an ordinary company. "The states will always have something to say because we are strategic industries regarding their security."

A source close to French Economy Minister Pierre Moscovici said: "The more an operation affects strategic sectors, the more the state's role - both direct and indirect - and their rights will be important."

pmr/wai/arp

EADS - EUROPEAN AERONAUTIC DEFENCE AND SPACE COMPANY

.


Related Links
The Military Industrial Complex at SpaceWar.com
Learn about the Superpowers of the 21st Century at SpaceWar.com






Comment on this article via your Facebook, Yahoo, AOL, Hotmail login.

Share this article via these popular social media networks
del.icio.usdel.icio.us DiggDigg RedditReddit GoogleGoogle




Memory Foam Mattress Review
Newsletters :: SpaceDaily :: SpaceWar :: TerraDaily :: Energy Daily
XML Feeds :: Space News :: Earth News :: War News :: Solar Energy News





MILPLEX
Talks on EADS shake-up 'proceeding well': Germany
Frankfurt (AFP) Dec 04, 2012
Talks on changes in the shareholder structure of EADS, the parent company of aircraft maker Airbus, are continuing apace and could be completed very soon, the German economy ministry said Tuesday. "The negotiations on a new shareholder structure at EADS are proceeding well. But key details have still to be worked out. The aim is to reach an agreement as soon as possible," a ministry spokesma ... read more


MILPLEX
Japan authorises N. Korea rocket interception

Dutch to send Patriot missiles to Turkey-Syria border

STSS Demonstration Satellites Collect Data for Future Operational Space Missile Tracking System

Patriot Air and Missile Defense System Gets Smarter, Faster and Tougher

MILPLEX
Iran to observe North Korea missile test

Severodvinsk submarine launches first cruise missile at ground targets

Patriots: The 'hit-to-kill' star missiles of the US armoury

MEADS Intercepts Air-Breathing Target at White Sands Missile Range

MILPLEX
Iran tells US to 'recount' drones

AeroVironment to Offer Tier II Vertical Takeoff and Landing

Sudan drone down in Khartoum area: official media

X-37B Space Plane: Still in Search of a Mission

MILPLEX
US Air Force selects Raytheon to develop future Protected SATCOM System

General Dynamics Awarded Contract Under New U.S. Army Rapid-Acquisition Communications Program

Astrium to provide military X-band satcoms to six UK Royal Navy vessels

Lockheed Martin to Demonstrate Key Component of Tactical MilSat Communications System

MILPLEX
Raytheon BBN Technologies awarded DoD funding to enhance text understanding

Argentina on track to buy 14 Brazil APCs

Raytheon receives US Army contract for JAGM continued technology development

JLENS simultaneously tracks swarming boats, cars, aircraft

MILPLEX
Trichet could become new EADS chairman: report

EADS deal ends state grip, boosts shares and Daimler

Senate approves $631 bn defense budget

EADS unveils new structure to 'simplify' group

MILPLEX
Azeri, Armenian FMs in Ireland for OSCE

Clinton praises NATO's progress as she bids farewell

Angela Merkel, Europe's guiding light and lightning rod

India stands firm on South China Sea

MILPLEX
Nature Materials Study: Boosting Heat Transfer With Nanoglue

New optical tweezers trap specimens just a few nanometers across

How 'transparent' is graphene?

A graphene nanotube hybrid




The content herein, unless otherwise known to be public domain, are Copyright 1995-2014 - Space Media Network. AFP, UPI and IANS news wire stories are copyright Agence France-Presse, United Press International and Indo-Asia News Service. ESA Portal Reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. Advertising does not imply endorsement,agreement or approval of any opinions, statements or information provided by Space Media Network on any Web page published or hosted by Space Media Network. Privacy Statement