Posted on 02/09/2007 9:52:58 AM PST by smonk
Berlin - German-US auto giant DaimlerChrysler agreed on Friday to cut its stake in European aerospace giant EADS to 15%from 22.5%, ensuring a balance between French and German shareholders.
The agreement is set against a background of tense wrangling for months over the role of German and French interests in the European Aeronautics Defence and Space Company (EADS).
DaimlerChrysler said in a statement it would sell a 7.5% stake in EADS, the parent company of aircraft maker Airbus, to a consortium of public and private investors.
DaimlerChrysler said it had signed an agreement to this effect on Friday and would receive 1.5bn for the stake.
The company will keep its voting rights on the sold shares.
The move by DaimlerChrysler has been in the pipeline for months and the German government has helped to bring together the mainly local consortium to take over the shares.
Balance of power
Under the deal, which is expected to be concluded before the end of this quarter, a consortium of 15 public and private investors, most of them German, will buy the stake the automobile company is selling.
The balance of power between German and French interests in EADS has a strong political context since the group is parent to European aircraft maker Airbus.
Meanwhile Airbus itself is in a dilemma over how and where to streamline its activities to deal with huge financial problems arising largely from delays to its A380 superjumbo airliner.
The company could cut up to 10 000 jobs.
Airbus workers in Germany and France, anxious that cuts will fall on activities in their country, have demonstrated in defence of their jobs recently.
In Paris on Friday, German Chancellor Angela Merkel and French prime Minister Dominique de Villepin said that they wanted to see "a fair sharing of the effort" of restructuring.
Complex deal
Airbus chief Louis Gallois is expected to announce the details of the plans on February 20 and he hinted this week that they could include the sale of some sites.
Such a decision would put the company in conflict with Berlin, which has warned it might then review its defence contracts with EADS.
The consortium which will acquire the DaimlerChrysler interest in EADS includes German state-owned KfW bank, Deutsche Bank, Commerzbank, Goldman Sachs and a number of regional public-owned banks or "Landesbanken".
The state-owned investors will take 40% of the shares and the private investors 60%.
Media reports have said the deal could be based on a complex construction of derivative securities that would run for a number of years.
It will for the first time see the German federal government and regional states invest in EADS.
'Difficult negotiations'
The federal government is acquiring 13% of the DaimlerChrysler stake through the involvement of KfW, while the role of the regional states is more symbolic.
Berlin has sought to keep the shares in German hands in order to maintain the current balance of power between French and German shareholders in EADS.
"A stable shareholders' structure puts us in a better position to handle the difficult negotiations that lie ahead," Chancellor Angela Merkel's spokesman, Ulrich Wilhelm, said.
An EADS spokesperson said of DaimlerChrysler's announcement: "This transacion won't change the French-German balance. Our corporate governance remains completely unchanged."
French interests in EADS are controlled by the holding company Sogeade, which holds 15% controlled by the French state.
Another 15% is owned by the media and defence group Lagardere, which also plans to sell 7.5%, reducing the French stake to 22.5%.
So the German government will buy the investment being sold by DaimlerChrysler just to keep jobs in Germany?
Hopefully the Germans will update their CAD software before they venture out on designing the wiring for the A350.
I saw a MSM article yesterday were they were singing the praises of how great the interior was of the Airbust A380 and how big and roomy the seats were.
Yahh, thats the airbust presentation model filled lounges and leather couches. Just wait till get on one of these after the airlines have decided what size seat and spacing you'll have in coach. It will be the same torture devices they put on every other plane's coach section. This plane has 3rd world bulk hauler written all over it.
"So the German government will buy the investment "
No, it's a consortium of private investors.
---US auto giant DaimlerChrysler---
So Daimler is an American company????
---The company will keep its voting rights on the sold shares---
How peculiar.
Ping!
Buy Airbus SHORT maybe?...
From the story posted above:
"The consortium which will acquire the DaimlerChrysler interest in EADS includes German state-owned KfW bank, Deutsche Bank, Commerzbank, Goldman Sachs and a number of regional public-owned banks or "Landesbanken". "
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