August 18, 2022

EADS Seeks Flexibility on Shareholder Stakes

“We are pushing at the management level for a solution which allows shareholders to sell their shares if they want,” Louis Gallois, the chief executive of European Aeronautic Defense and Space, said during an interview late Tuesday.

The balancing of national interests in EADS, the parent company of Airbus, was enshrined in a shareholder pact that dates to the group’s creation in 2000. That agreement stipulates that the French and German stakes in EADS must be equal.

Daimler, the German automaker, owns 15 percent of EADS, while a consortium of German private- and public-sector banks holds 7.5 percent, though Daimler holds the banks’ voting rights. The French government and Lagardère, the media and aerospace conglomerate, own a combined 22.5 percent share.

Both Daimler and Lagardère have made clear in recent years that they do not view their EADS holdings as core to their operations. But the French and German governments have struggled to broker a sale of the shares to other investors in a way that would preserve the ownership balance. Moreover, because of the strategic importance of EADS, both Paris and Berlin have been eager to retain the power to block any potential hostile takeover by a foreign entity.

“We could propose other solutions to protect the company from hostile takeovers,” Mr. Gallois said. “We don’t necessarily need to have controlling shareholders for that.”

Earlier this year, some investors proposed creating so-called golden shares that would give France and Germany a veto over any strategic decision, like a takeover. But such a mechanism is not allowed in the Netherlands, where EADS is incorporated.

Mr. Gallois emphasized that the days of national power struggles and mutual suspicions within EADS had been consigned to the past. After an industrial crisis that resulted in a two-year delay of the Airbus A380 superjumbo jet, EADS in 2007 streamlined its management, eliminating a cumbersome structure that had placed two chief executives — one German, one French — and two chairmen at the helm.

That change, Mr. Gallois said, “had the immense advantage to make us a much more normal company.” The natural next step in the company’s evolution, he said, was to do away with the enforced balance of French and German ownership.

“I think the balance could be ensured, for instance, by the nationality of members of the board, by majority rules on the board, by agreements on the governance of the company,” Mr. Gallois said. “If there are no longer controlling shareholdings, the question of balance becomes less crucial.”

Any modifications to the shareholder pact could coincide with an expected transition at the top of EADS next year. Mr. Gallois, a 67-year-old Frenchman, is widely expected to step down and to be replaced by Tom Enders, the 52-year-old German who is chief executive of Airbus.

Mr. Gallois confirmed that the EADS board was “well engaged” in its discussions about his successor, but declined to indicate when an announcement might be made. He also appeared to rule out any dark-horse candidates for the job.

“I am not sure that you will be very surprised,” he said.

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