By David Pearson
FARNBOROUGH, England--Ministers from France and Germany said
Monday they expect to change the shareholder structure of European
Aeronautic Defence & Space Co. (EADSY, EAD.FR) by year-end to
allow industrial group Daimler AG (DDAIY, DAI.XE) to reduce its
stake while preserving the delicate balance of power between French
and German interests in the company's governance.
France and Germany would continue playing a significant role in
the company, the ministers said. EADS's new chief executive, Tom
Enders, has frequently said the company would be better off without
state influence, arguing that in the U.S. and U.K., the state
protects its strategic interests in the defense sector without
holding equity in defense contractors.
Peter Hintze, parliamentary state secretary in Germany's
Ministry of Economics, reaffirmed that Germany intends to keep the
balance of power inside EADS as it is, though he didn't exclude
that the respective French and German shareholdings could be
reduced at some point in the future.
"The German government has repeatedly said that it has an
interest to keep the shareholder balance at EADS as it is," Mr.
Hintze told a press conference at the Farnborough International
Airshow.
However, he also noted that "if the French government were to
say they are interested in reducing its stake, Germany would be
happy to go along."
However, French Transport Minister Frederic Cuvillier said his
preference is that the state must preserve its interests where they
lie. "A state has a strategic interest to get involved, to
accompany, create conditions and negotiate. Reducing the role of
the state isn't on the agenda. I'm not there to reduce the role of
the state where it exists. That's neither our philosophy nor our
policy. Indeed, it's quite the reverse."
Hintze commented that "EADS's importance is stronger for the
French economy than it is for Germany, which has market-leading
positions in many other industries like the chemicals or
engineering sectors."
French and German interests currently each control 22.35% of
EADS's capital. On the French side the holding is represented by
Sogeade, a specially created holding company that's two-thirds
controlled by the state and one-third by the Lagardere SCA (MMB.FR)
media group. German industrial group Daimler currently controls
22.5% of the voting rights of EADS, but has lodged a 7.5% stake
with a consortium of private and public-sector investors and wants
to exit the aerospace company completely.
The German government, meanwhile, wants to transfer 7.5% of
Daimler's stake to a public-sector bank.
Hintze said the issue of changes in EADS's shareholding
structure will be done in an "orderly" way in the coming months,
noting that because EADS is a Netherlands-registered company Dutch
law will have to be taken into account.
-Write to David Pearson at david.pearson@dowjones.com