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Airbus Parent Expected to Alter Base of Its Investors Airbus Parent Expected to Alter Base of Its Investors
(about 21 hours later)
PARIS — The board of European Aeronautic Defense & Space, the parent company of Airbus, was expected Monday to announce a significant restructuring of its core shareholder base that would give the German government a direct stake in the group equal to that of France. PARIS — The board of European Aeronautic Defense & Space, the parent company of Airbus, was expected as early as Monday evening to announce a significant restructuring of its core shareholder base that would, for the first time, give the German government a direct stake in the group on par with that of France.
The restructuring, which was the subject of a board meeting late Sunday, would dissolve a decade-old agreement that gave the two countries an effective veto over company strategy, a factor that contributed to the failure of a proposed merger between EADS and BAE Systems of Britain in October. The restructuring, which was the subject of a board meeting late Sunday, would also dissolve a decade-old agreement that gave the two countries an effective veto over company strategy, a factor that contributed to the failure of a proposed merger between EADS and BAE Systems of Britain in October.
One person familiar with the details of the plans said the state-owned German bank KfW was expected to acquire a 7.5 percent stake currently held by a consortium of public- and private-sector German banks, as well as another 4.5 percent from the German automaker Daimler, which owns 15 percent of the company. In a statement Monday, EADS confirmed that it was in ‘‘active’’ discussions with its core shareholder group — which includes the French government, the French conglomerate Lagardère and the German carmaker Daimler — about potential changes to its ownership structure and governance and said a further announcement would be made  ‘‘as appropriate.’’
The French government, which already owns 15 percent of EADS directly, has agreed to relinquish 3 percent of its voting rights in the company, said the person, who spoke on condition of anonymity because the board had not yet voted on the change. The French would continue to hold the full dividend rights of its 15 percent stake, but ownership of the other 3 percent would be transferred to a foundation, registered in the Netherlands, that would have no voting rights. According to people familiar with the details of the plan, Germany was expected to acquire a 12 percent stake through its state-owned bank, KfW. The transaction was expected to involve a 7.5 percent stake currently held by a consortium of public- and private-sector German banks, as well as another 4.5 percent from Daimler, which presently owns 15 percent of the company.
Details of the accord were expected to be announced Monday, the person said. The French government, which already owns 15 percent of EADS directly, has agreed to relinquish 3 percent of its voting rights in the company, said the people, who spoke on condition of anonymity because the change had not yet been formally approved. The French would continue to hold the full dividend rights of its 15 percent stake, but ownership of the other 3 percent would be transferred to a foundation, registered in the Netherlands, that would have no voting rights.
The new arrangement would end a shareholder pact that dates to the creation of EADS in 2000, which was designed to balance the national interests of France and Germany by giving a core group of shareholders special veto rights and the right to appoint the members of the company’s 11-seat board. A formal announcement of an accord was expected to be made before European stock markets opened on Tuesday, and possibly as early as Monday evening, the people said.
A German government spokesman indicated Monday that an agreement was imminent.
‘‘Efforts are being made to reach an agreement as quickly as possible,’’ Reuters quoted a German economy ministry spokesman as saying.
French Finance Ministry officials did not immediately return calls seeking comment. Daimler and Lagardère declined to comment.
The new arrangement would end a shareholder pact that dates to the creation of EADS in 2000, which was designed to balance the national interests of France and Germany by giving a core  group of shareholders special veto rights and the right to appoint the members of the company’s 11-seat board. Those special rights would disappear under the new accord.
The core shareholder group has until now included Daimler, as well as Lagardère the French magazines and missiles conglomerate, which owns a 7.5 percent stake in EADS and whose chairman, Arnaud Lagardère, is currently chairman of the EADS board.The core shareholder group has until now included Daimler, as well as Lagardère the French magazines and missiles conglomerate, which owns a 7.5 percent stake in EADS and whose chairman, Arnaud Lagardère, is currently chairman of the EADS board.
Both Daimler and Lagardère have long made clear their desire to sell their stakes, which neither considers core to its operations. The dissolution of the shareholder agreement now frees the two companies to dispose of their holdings. Some of the shares could be sold on the open market, but European news media reports last week suggested that EADS was also considering a share buyback that could absorb a significant portion of the outstanding shares. Both Daimler and Lagardère have long made clear their desire to sell their stakes, which neither considers core to its operations. The dissolution of the shareholder agreement now frees  the two companies to dispose of their holdings.
EADS was expected to call for an extraordinary shareholders’ meeting in the first quarter of next year to approve changes to the ownership structure as well as a new slate of board directors. Some of the shares could be sold on the open market, but people with knowledge of the talks said that EADS was also preparing a general share buyback offer that could absorb a significant portion of the outstanding Daimler and Lagardère holdings.
Mr. Lagardère was not expected to be renominated as chairman, although he was likely to be replaced by another Frenchman. According to EADS’s bylaws, the chairman and chief executive must be split between a French and a German. Thomas Enders, who took over as chief executive in June, is a German. EADS was expected to call for an extraordinary meeting of all shareholders in the first quarter of next year to approve changes to the ownership structure, as well as a new slate of board directors.
Mr. Lagardère  — who said last month that he expected to divest his EADS stake by the end of next year — was not expected to be renominated as chairman, although he was likely to be replaced by another Frenchman. According to EADS’s bylaws, the chairman and chief executive must be split between a French and a German. Thomas Enders, who took over as chief executive in June, is a German.
EADS has long sought a new shareholder arrangement that would preserve the politically sensitive balance of influence between France and Germany without subjecting key management decisions to the approval of politicians in Paris and Berlin.EADS has long sought a new shareholder arrangement that would preserve the politically sensitive balance of influence between France and Germany without subjecting key management decisions to the approval of politicians in Paris and Berlin.
The impact of such political interference was on prominent display in October, when the German government led by Chancellor Angela Merkel failed to approve the EADS-BAE combination, sinking a deal that would have created the world’s largest aerospace group.The impact of such political interference was on prominent display in October, when the German government led by Chancellor Angela Merkel failed to approve the EADS-BAE combination, sinking a deal that would have created the world’s largest aerospace group.