EADS weighs defense business spin-offs | Business| Economy and finance news from a German perspective | DW | 19.06.2013
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EADS weighs defense business spin-offs

European aerospace and defense group EADS is considering selling parts of its defense activities in an effort to boost profitability, CEO Tom Enders has said. EADS sees a general need for consolidation in the sector.

European Aeronautic, Defense and Space Company (EADS) might divest parts of its defense business, as the company was looking into the profitability and market prospects of its various activities, Chief Executive Tom Enders said Wednesday.

Speaking in an interview with Germany's "Welt" daily newspaper, Enders said EADS was looking closely at which businesses it should continue to operate and which might have a better future in a joint venture or under different ownership.

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EADS was well positioned in the defense market, Enders said, but there was scope for consolidation in the market, particularly in the development of marine and land-based systems. In addition, there was also a need for bigger industry integration in the helicopter business.

EADS is most commonly associated with planemaker Airbus. But the firm is also Europe's biggest defense contractor, manufacturing military aircraft, helicopters and defense systems at its subsidiaries Astrium, Cassidian and Eurocopter.

The divisions posted defense revenues of 12 billion euros ($16.1 billion) in 2012 - about 20 percent of EADS' total revenues last year. Enders noted that the firm wouldn't abandon its defense activities altogether.

However, he didn't rule out putting a merger with Britain's arms manufacturer BAE systems back on the agenda. The tie-up was pushed by Enders in 2012, but faltered amid resistance from the governments of Germany, France and Britain, which are the biggest shareholders in EADS.

"Never say never in the business world," Enders said, but added that an initiative in this direction wouldn't come in the foreseeable future.

uhe/msh (dpa, Reuters)

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