December 6, 2012 11:57 am

EADS – states of denial

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New structure could result in more, rather than less, state interference

Listen up, there at the back. Three European nations are raising their combined stake in EADS and this will result in less state interference, not more. Is that clear?

Fresh from vetoing EADS’s grand plan to merge with BAE Systems, Germany has big-footed its way on to the aerospace group’s shareholder register. EADS’s current core shareholders are France (with 15 per cent), French media group Lagardère (7.5 per cent), Spain (5.5 per cent) and German industrial giant Daimler (22 per cent). A new shareholder and governance pact unveiled this week will see Daimler and Lagardère free to exit in 2013, the German state taking 12 per cent, the French reducing their stake to a similar level and Spain taking 4 per cent.

Berlin was taken aback (to put it mildly) by the €35bn plan to merge EADS and BAE, and now has a sizeable inferiority complex about EADS and Airbus. German officials appear to have viewed the merger – the brainchild of Tom Enders, EADS chief executive – as tantamount to a hostile takeover. The lesson they are taking away is that Berlin needs a direct ownership stake equal to that owned by Paris to ensure that its interests are accommodated.

The new governance structure is being presented as a diminution of state influence at EADS because Germany and France will not have veto power. Mr Enders says EADS will be operationally free of any single shareholder. Its shares are up 20 per cent over the past two weeks (a share buy-back should remove any stock overhang and the free float rises to 70 per cent). Yet scepticism is in order. By blocking the BAE merger, Berlin’s fingerprints are all over EADS’s strategy already. With a 12 per cent direct stake, does anyone really expect Berlin to be a passive presence after the BAE ballyhoo? Mr Enders may find that the normal company he wants to run is still a prisoner of its biggest shareholders.

Email the Lex team in confidence at lex@ft.com

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