October 20, 2020

Heir Apparent at EADS Appears in Internet Video

Some media commentators are calling the video of the 50-year-old heir and chief executive of the Lagardère media-to-missiles empire an embarrassment.

The nearly three-minute video — more Fashion TV than the financial news network CNBC — has received more than half a million hits since it was posted on the YouTube video sharing site Wednesday. It was shot as Mr. Lagardère and Jade Foret, a 20-year-old fashion model, posed recently for photos to accompany a cover story in the weekend magazine of Le Soir, a Belgian newspaper. The footage shows Mr. Lagardère and Ms. Foret kissing and embracing as they discuss how they met and fell in love this year.

While the video is unlikely to ruffle many feathers within Mr. Lagardère’s publishing business, which includes magazine titles like Elle and Paris Match, it has been viewed with consternation in the more buttoned-down world of aerospace and arms making. And it has placed the Frenchman in the spotlight at a sensitive time for the board and crucial shareholders of EADS, formally European Aeronautic Defense and Space, and its Airbus subsidiary, who have come under pressure from management to create a new governance structure.

Louis Gallois, the EADS chief executive, said in June that he and other top group managers were pressing for a new arrangement that would allow any investor to buy or sell shares freely in the company, while still preserving the delicate balance of influence between France and Germany in its governance.

A shareholder pact that dates from the group’s creation in 2000 stipulates that the French and German stakes in EADS must be equal.

Currently, Mr. Lagardère’s company owns a 7.5 percent stake in EADS while the French government holds 15 percent. Meanwhile, Daimler, the German automaker, owns 15 percent and a consortium of German private- and public-sector banks holds 7.5 percent.

But both Daimler and Lagardère have made clear in recent years that they do not view their EADS holdings as core to their operations, and 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.

A management restructuring brokered in 2007 by Nicolas Sarkozy, the French president, and his German counterpart, Angela Merkel, placed Mr. Gallois, a Frenchman, at the helm of EADS and Thomas Enders, a German, in charge of Airbus, the group’s largest business unit, for five years. The chairmanship of the group was awarded to a German under the proviso that Mr. Lagardère — also a close friend of Mr. Sarkozy — would take over that post in mid-2012.

But in recent years, Mr. Lagardère, who holds a seat on the EADS board, has appeared increasingly disinterested in his company’s aerospace assets. They are a legacy of his father, Jean-Luc, the former chief of Matra, a military contractor that was eventually merged in Airbus. According to a number of top managers, Mr. Lagardère’s attendance at EADS board meetings has been sporadic and often perfunctory.

Many in the French and German news media have reacted to the video with scorn. Both the German business daily Handelsblatt and the French newspaper Le Monde described it as “embarrassing” and “disturbing,” while Libération, another French daily, likened the video to a Brazilian soap-opera. Challenges, a French newsweekly, found it “stupefying.”

Mr. Gallois, the EADS chief executive, told The Wall Street Journal as recently as last month that he expected the board would appoint Mr. Lagardère chairman next year. Alexander Reinhardt, an EADS spokesman, would not be drawn into answering what implications, if any, could follow from the video controversy.

“It is not up to EADS to comment on this,” Mr. Reinhardt said.

Ramzi Khiroun, a spokesman for Mr. Lagardère, did not return calls requesting comment.

Article source: http://feeds.nytimes.com/click.phdo?i=03a3bd8c8348e3c6bc24052f621131a4

EADS Making Progress at Opening Up Shareholding, Chief Asserts

PARIS — The parent company of Airbus is stepping up pressure on its main shareholders to reach an accord in the coming months that would allow any investor to freely buy or sell shares in the company while still preserving the delicate balance of influence between France and Germany in its governance.

“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 Space, said during an interview late Tuesday.

The balancing of national interests in EADS, one of Europe’s largest military contractors, 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-to-missiles 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. In the wake of 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 Thomas 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.

Article source: http://feeds.nytimes.com/click.phdo?i=5fcb4aafeb78b58dfbacbb5e6edde898