The German federal government is to purchase a 7.5% stake in European aerospace giant EADS in order to preserve the Franco-German ownership balance in the company.
In the next month, the state-owned KfW bank is to sign a letter of intent to acquire the…
The German federal government is to purchase a 7.5% stake in European aerospace giant EADS in order to preserve the Franco-German ownership balance in the company.
In the next month, the state-owned KfW bank is to sign a letter of intent to acquire the shareholding, which based on the current market value would be worth approximately E1.3bn (US$1.76bn), from German car group Daimler. The sale is then slated to take place in mid-2012, after which KfW is expected to seek to sell the stake to German private investors.
The move is understood to be the result of Daimler seeking to reduce its holding in EADS as it pursues its strategy of focusing on its core automotive business. With a number of foreign investors having expressed interest in EADS, such as the sovereign wealth fund Qatar Investment Authority earlier this year, the federal government moved to make sure the stake remained in German hands.
Commenting on the plan, Bodo Uebber, member of the board of management of Daimler for Finance & Controlling and Daimler Financial Services, said: “We are in agreement with the federal government: The establishment of EADS was one of the pioneering achievements among European industrial projects in a strategically highly important and sensitive sector. Due to the strategic importance of EADS, the government has decided to safeguard the German-Franco balance through its investment by KfW bank group. As a result, one of the decisive factors for the success of EADS is maintained and an equivalent shareholder structure between the two sides is achieved.”
Daimler currently owns a 15% economic interest and 22.46% of the voting rights in EADS, which it co-founded back in 2000. Ever since its formation, Daimler has combined its voting rights with those of Spanish state-owned industrial holding company SEPI (5.48%) and French governmental investment vehicle Sogeade (22.46%) in a so-called shareholder pact that holds a majority 50.4% in EADS. The remaining 49.6% is traded as free-float on a number of European stock exchanges.
Following the stake sale, the voting rights of both Daimler and KfW are to be pooled in an intermediate holding company that Daimler will manage.
Daimler’s remaining 7.5% economic stake (15% voting interest) is currently held by an investor consortium called Dedalus. The car company is to hold discussions with the German government over the long-term structure of this consortium, with the shared understanding that it should remain in place.
EADS’ space interests predominately focus on subsidiary Astrium as well a 30% stake in Arianespace.
