EADS Plans US Acquisition, Memo Says | Europe| News and current affairs from around the continent | DW | 10.03.2008
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EADS Plans US Acquisition, Memo Says

European aerospace group EADS aims to further boost its position in the defense market with a US acquisition, according to an internal memo.

Airbus chairman Louis Gallois addresses journalists during a press conference in Paris, Jan. 17, 2007.

EADS chief Gallois has expansion plans in the US

The European Aeronautic Defense and Space Company, fresh from the success of landing a giant order from the US Defense Department, plans to make an acquisition in the United States this year, a letter sent to its staff showed.

In the letter, which was obtained by the AFP news service, EADS top executive Louis Gallois said he wanted the company to make two acquisitions this year, with at least one of them in the US. EADS owns Europe-based plane maker Airbus.

Gallois wrote that he wanted to put to the board "two takeover projects in the fields of defense, security or services." He wrote: "One of them at least should be in the United States."

Plans for Mobile, Alabama factory

In a recent controversial move, the Pentagon awarded a contract worth $35 billion (22.7 billion euros) to EADS and US group Northrop Grumman, instead of to US group Boeing, which has said it might protest the decision.

Airbus tanker aircraft KC-30, in the air

Airbus beat Boeing for a $35 billion tanker contract

The deal drew heavy fire from US politicians, who have said they intend to investigate the contract's awarding procedure. Boeing has also said it is contemplating legal action against EADS.

EADS plans to build a factory in Mobile, Alabama, to help build the tanker aircraft, based on Airbus planes, but this has also caused concern among staff at Airbus in France.

Gallois repeated his intention to "position EADS on the American defense and security markets, and, a major step, ensure a successful launch for the KC-45A (refueling plane)."

Plan part of "Vision 2020"

Gallois had said in January that he was "still on the lookout for medium-size takeovers in the USA," the biggest market for defense equipment in the world.

He made that remark when presenting his "Vision 2020" program, intended to reduce the group's dependence on the Airbus civil aircraft subsidiary and to changes in the value of the dollar.

EADS and Airbus are exposed to the rise of the euro against the dollar, which makes their products more expensive. Aerospace products are usually sold in dollars, which hurts the profits of European companies whose bills usually are paid in euros.

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