BAE Systems in Talks With EADS to Sell Airbus Stake
April 7, 2006
British defense and aerospace giant BAE Systems confirmed Friday it was holding negotiations on the sale of its 20-percent stake in aircraft maker Airbus -- recently valued at 3.5 billion euros ($4.2 billion) -- to its Franco-German counterpart EADS, the European Aeronautic Defense and Space Company.
"Discussions are at an early stage and a further announcement will be made if and when appropriate," BAE said in a brief statement to the London Stock Exchange.
According to a BBC report, BEA Chief Executive Mike Turner is expected to meet with Alan Johnson, head of Britain's Department of Trade and Industry, on Friday to discuss the details.
"We believe that now is the right time for us to divest our Airbus shareholding to allow us to concentrate on our core trans-Atlantic defense and aerospace strategy," Turner said in a statement.
EADS is Europe's leading aeronautic industrial group. It already owns 80 percent of European aircraft maker Airbus and also has interests in military aircraft, satellites and other defense equipment.
Job cuts to follow?
A BBC report on Thursday said the sale of Airbus holdings would mean the end of British ownership of Airbus manufacturing sites in North Wales and near Bristol, western England. The news prompted union leaders to seek urgent talks with BAE because Airbus directly employs some 13,000 people in Britain.
Amicus, Britain's largest manufacturing union, voiced concern about the possibility of job cuts in the future.
"Obviously we have concerns, particularly because of uncertainty about any impact on jobs," said national officer Ian Waddle. "We want to find out if production will remain in the UK or whether it will be shifted to the countries where the new buyers are based," he said.
On top of the people directly employed by Airbus in Britain, the BBC said up to a further 135,000 jobs at British suppliers also depended on the company.
France to maintain its stake in EADS
In a separate development, the French government announced on Thursday it was determined to keep its 15-percent stake in EADS amid uncertainty about the company's shareholding structure.
On Tuesday, two of the main shareholders in EADS, German-US automaker DaimlerChrysler and French defense and media group Lagardere, said they would cut their holdings substantially.
DaimlerChrysler's interest is to be reduced from 30.0 percent to 22.5 percent while that of Lagardere will be lowered from 15.0 to 7.5 percent. Both groups said they were reducing their holdings in order to concentrate on their core activities, automobiles for DaimlerChrysler and the media for Lagardere.
French Economy Minister Thierry Breton said that the "French state has no intention of reducing its stake of 15 percent in the capital of EADS" during a visit to the French town of Poitiers, according to the finance ministry.