Non-Subscriber Extract
BAE Systems begins talks on sale of Airbus stake
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| 07 April 2006 |
By Guy Anderson, JDI Editor
BAE Systems has begun talks with EADS with a view to selling its 20 per cent stake in Airbus, arguing that the holding is "not core to our strategy".
The sale - a "unanimous decision" on the part of the BAE Systems' board - is expected to raise upwards of GBP3 billion (USD5 billion), although it was stressed that discussions remain at an "early stage".
It has been widely assumed that the deal will pave the way for another transatlantic acquisition for Europe's biggest defence group, which gained a major foothold in the US through its GBP2.2 billion purchase of land specialist United Defense in June 2005.
EADS co-chairman Noel Forgeard made it clear in March that he was keen for the group to take sole ownership of Airbus. The pan-European operator has first option on BAE Systems' holding "at open market value" - to be settled with cash or EADS' shares - under an agreement dating from 2000.
Airbus was by far the biggest money-spinner for EADS in 2005, accounting for two-thirds of the group's EUR34.2 billion revenue and 81 per cent of its operating profit.
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