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| Version 1 | Version 2 |
|---|---|
| BAE agrees to £1.87bn Airbus sale | BAE agrees to £1.87bn Airbus sale |
| (about 8 hours later) | |
| UK-based defence firm BAE Systems has agreed to sell its 20% stake in planemaker Airbus to EADS for 2.75bn euros (£1.87bn; $3.53bn). | |
| If shareholders agree to the deal, pan-European EADS - which owns 80% of Airbus - will own the firm outright. | |
| The 13,000 Airbus workers in the UK, where the planes' wings are built, are not thought to be affected by the deal. | |
| "The board believes that Airbus is facing a challenging short to medium-term outlook," BAE said. | "The board believes that Airbus is facing a challenging short to medium-term outlook," BAE said. |
| BAE can sell its 20% stake after a 2001 deal it signed with Franco-German EADS. | BAE can sell its 20% stake after a 2001 deal it signed with Franco-German EADS. |
| It estimates the sale of the stake - which has to be approved by BAE shareholders - will generate net proceeds of about £1.2bn. It will then return about £500m to shareholders. | It estimates the sale of the stake - which has to be approved by BAE shareholders - will generate net proceeds of about £1.2bn. It will then return about £500m to shareholders. |
| Airbus troubles | Airbus troubles |
| BAE first said in April this year that it was thinking of selling its stake in Airbus. | BAE first said in April this year that it was thinking of selling its stake in Airbus. |
| After BAE and EADS failed to reach agreement on a price for the sale, investment bank Rothschild was brought in to value the stake. | After BAE and EADS failed to reach agreement on a price for the sale, investment bank Rothschild was brought in to value the stake. |
| Its estimate of the stake's value at about £1.9bn was much lower than analysts' expectations of £3bn-£4bn. | Its estimate of the stake's value at about £1.9bn was much lower than analysts' expectations of £3bn-£4bn. |
| Airbus has had a difficult year, announcing in June that deliveries of its new A380 plane would be delayed following problems with wiring. | Airbus has had a difficult year, announcing in June that deliveries of its new A380 plane would be delayed following problems with wiring. |
| In a statement, BAE said it thought "a significant amount of management focus, time and investment would be required to address the issues currently facing Airbus". | In a statement, BAE said it thought "a significant amount of management focus, time and investment would be required to address the issues currently facing Airbus". |
| BAE chief executive Mike Turner told the BBC that the time was right to sell. | BAE chief executive Mike Turner told the BBC that the time was right to sell. |
| "In the long term Airbus will do very well. Cleary it has issues today but I see them as quite temporary," he said. | "In the long term Airbus will do very well. Cleary it has issues today but I see them as quite temporary," he said. |
| "It needs to keep costs down because of the weakness of the dollar and has got to find money to invest in the new family of aircraft. Also Boeing has re-entered the market with a vengeance and a very good product." | "It needs to keep costs down because of the weakness of the dollar and has got to find money to invest in the new family of aircraft. Also Boeing has re-entered the market with a vengeance and a very good product." |
| EADS co-chief executive Louis Gallois said BAE's comments had come as no surprise. | |
| "We knew we were facing considerable challenges. We are working on them and we will have a complete overview in a few weeks," Mr Gallois told Le Monde newspaper. |