New EADS Ownership Structure Agreed Upon


This article first appeared in Aerospace Daily & Defense Report.

FRANKFURT -- EADS shareholders and the governments of France, Germany and Spain today agreed on a new ownership structure for Europe's biggest aerospace group after five days of intense negotiations.

The complex agreement sees France and Germany each holding 12% stakes in EADS and Spain an additional 4%, changing a structure that provides France 15% and Spain 5.6%.

The German government currently holds no stock but is represented by automotive group Daimler's 15% stake. The company has long expressed its wish to sell, as has French company Lagardere Group, which holds a 7.5% stake.

Both companies are selling their holdings, with part of Daimler's sold to Germany's government-controlled development bank KfW.

The new ownership structure also comes with a commitment from the three governments to keep their combined holding to 30%, down from 51%, in an effort to placate EADS's shareholders, which are each limited to a 15% stake of the manufacturer's voting stock.

EADS CEO Tom Enders has been trying to reduce the influence of the government shareholders, most recently by means of a merger with BAE Systems. But that plan collapsed because of opposition led by the German government. And while the holding owned by the governments increases, the new restrictions on the combined stake are welcomed by EADS management.

EADS's board of directors will consist of 12 members appointed by a board committee, and no member will have veto rights.

The company also plans to buy back up to 15% of its outstanding shares, which will include part of the Daimler and Lagardere holdings.

"We are making a big leap forward in terms of governance, actually the most important change since the creation of our company more than 12 years ago," Enders says, adding that "strategy and industrial projects in the future will solely be defined and decided by the board of directors and the executive team."

Credit: Airbus Military

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