Airbus Defense Unit Plans Disposals for Narrower Strategy

Airbus Group NV will focus its defense activities on space launchers and satellites, military aircraft as well as missiles and dispose of a group of assets as part of a reorganization that includes thousands of job cuts.

While the Blagnac, France-based company will strengthen its remaining portfolio through investments, it plans to sell units including its commercial and para-public communication business, Fairchild Controls, Rostock System-Technik, AvDef, ESG and Atlas Elektronik GmbH, Airbus said in a statement today. Airbus will also explore a complete or partial sale of its security and defense electronics businesses.

“The portfolio review is a logical next step in the overall transformation process,” Bernhard Gerwert, chief executive officer of Airbus Defence and Space, said in the statement. “It will strengthen Airbus Defence and Space’s business core, unlocking its full potential to drive the defense and space industry forwards.

Airbus in December said it will cut 5,800 positions at its defense operations in the company’s steepest job cuts in half a decade, reflecting unfulfilled defense ambitions that have become a sideshow to its dominant Airbus civil aircraft business. The announced cuts, equal to 15 percent of its workforce in defense and space, include shuttering facilities in Germany, France, Spain and the U.K., EADS said at the time.

Airbus’s defense operations had about 14 billion euros ($18.1 billion) in revenue last year and employ about 40,000 people. The units labeled for sale today have combined revenue of about 2 billion euros, Airbus spokesman Lothar Belz said. As Airbus is a minority shareholder in some assets, including Atlas, which is 51 percent owned by ThyssenKrupp AG, group revenue would not be diminished by that same amount after a sale, Belz said.

Airbus seeks to have indications of interest from potential acquirers by year-end, and plans to complete the divestments by mid-2015, Belz said.

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