European Aeronautic, Defence & Space Co. Chief Executive Officer Louis Gallois said investors would benefit from a higher proportion of freely traded stock, as two major shareholders consider cutting their stakes.
“The extension of the free float would be a benefit for all shareholders,” Gallois told journalists at a meeting in Paris ahead of this year’s air show in Le Bourget. “Discussions have been engaged in Germany on the organization of shareholders. I suggest we take this opportunity to adopt not a short-term solution, but a solution that is sustainable in the long term.”
German carmaker Daimler AG (DAI) and French publisher Lagardere SCA (MMB) have expressed interest in cutting their stakes in EADS to focus on their main businesses. France and Germany have sought to maintain a balance in their stakes since EADS was founded a decade ago, and the main investors still control slightly more than 50 percent, partly to protect EADS from a hostile takeover.
Daimler owns 15 percent of EADS and has voting control over a 7.5 percent stake that German banks and federal states agreed to buy in 2007. Both the banks and states as well as Daimler are looking to reduce their holdings. Lagardere owns 7.5 percent and also has management control over France’s 15 percent stake. Spain controls 5.46 percent of EADS.
France and Germany would be unable to hold so-called golden shares, a system granted by European law only for direct defense interests, Gallois said EADS is exploring other options, he said, without elaborating
Ultimately, the balance between French and German shareholdings is a “fact of life” that can’t change, Gallois said.
“It’s an industry of sovereign importance,” Gallois said. “Both countries have put most of their aerospace assets into this, and both want to have their share of jobs technologies, design office facilities. We have not merged France and Germany yet.”
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