EADS set to bolster independence with new chairman
PARIS (Reuters) - Airbus parent EADS EAD.PA paved the way to getting its first independent chairman on Tuesday, as it put finishing touches to proposals for a new board to be led by the former head of French defence group Thales, people familiar with the matter said.
Denis Ranque, 61, was contacted about the plan while still sailing in the Atlantic, setting in motion his probable return to power almost four years after he fell victim to a boardroom coup at Thales (TCFP.PA).
"He is a widely respected industry leader with experience of the sector and the sorts of areas where EADS does business," said a person familiar with the negotiations.
EADS officials declined to comment.
Ranque, formerly one of France's most high-profile executives who clashed with EADS while running Europe's largest defence electronics company, set off round the Atlantic several months ago to indulge his passion for sailing.
His name now features in a list of board members selected by an independent EADS nominations committee, putting him in pole position to be elected chairman following a shareholders' meeting expected at the end of March or in early April.
His comeback marks a defeat for Anne Lauvergeon, the former chief executive of French nuclear power engineering group Areva who had her government's backing for the EADS role, and a victory for EADS's German chief executive Tom Enders, who fought to keep political interference out of the selection process.
Director Sir John Parker, who heads the EADS nominations committee, also took a stand for the company's freedom to make its own choice, the sources said.
The appointments have tested the company's independence following a deal to unpick a shareholder pact dominated by the French and German governments and their proxy shareholders, Lagardere (LAGA.PA) and Daimler (DAIGn.DE).
"It has been a robust process. If you had seen people parachuted into the chairmanship the new agreement would have appeared hollow," the person familiar with the process said.
French ministerial support for Lauvergeon had raised concerns in the aerospace industry that EADS management would struggle to be seen as free of outside pressure despite breaking up a decade of control by French and German share-voting blocks.
Lauvergeon is nonetheless expected to be confirmed as one of two board members representing French national interests alongside ex-European Central Bank head Jean-Claude Trichet.
Former German business association leader Hans-Peter Keitel and former EADS co-chairman Manfred Bischoff are expected to perform a similar role for Germany in the shake-up, which was salvaged from the failure of EADS's efforts to buy BAE Systems (BAES.L).
France and Germany can approve two representatives each on the 12-person board, but analysts said it was symbolically important for EADS to demonstrate freedom under the new set-up by picking a chairman from the independent majority.
"Anne Lauvergeon has been confirmed as a board member. The important thing is that the chairman will be French," a French government source said, asking not to be identified.
EADS shareholders will be asked to adopt three resolutions setting in place the new governance regime that includes a 15 percent voting cap, as well as board nominations and a buyback of up to 15 percent of stock to help Lagardere exit the group.
Daimler, which co-founded EADS with Lagardere and the French government in 2000, has already sold part of its stake.
EADS shares closed fractionally higher at 34.94 euros on Tuesday, having gained 18 percent this year following the governance reforms and related share buyback plan.
Ranque's appointment would mark a return to the top of Europe's aerospace and defence industry following his dramatic early departure from the pinnacle of Thales (TCFP.PA) in 2009.
His selection by a former predator some four years later underscores the tight-knit nature of France's defence industry after the lanky, bespectacled engineer repelled at least two informal bids by EADS to take over Thales in the past decade.
Ranque fought hard against the idea on the grounds that Thales would be forced to sell its own aerospace business that supplies Boeing (BA.N), and embarked instead on a fruitless quest to buy engine maker Snecma, now called Safran (SAF.PA).
However people on both sides say he has good relations with Enders, who became EADS chief executive last year.
Also seen as appearing on the short list for the 200,000 euro-plus a year chairman's role were Philippe Camus, an EADS co-founder who chairs telecoms equipment group Alcatel (ALUA.PA), and Jean-Louis Befa, honorary chairman of Saint-Gobain (SGOB.PA).
Under Ranque state-controlled Thales transformed itself from a scandal-ridden behemoth reliant on arms sales to the Middle East into an internationally focused developer of technologies from spy satellites to cockpits and train signals.
However some analysts blamed his expansion for piling up loss-making contracts in places like Turkey. He also left behind losses on the A400M, the much-delayed Airbus airlifter plane for which he would now assume ultimate control as EADS chairman.
Ranque's first task would be to oversee a new strategy after the failure to acquire BAE Systems (BAES.L) interrupted efforts to bring EADS defence sales up to the level of Airbus sales.
However his arrival is not expected to trigger a new march on Thales (TCFP.PA), whose fate is now tied to its main industrial shareholder, Dassault Aviation (AVMD.PA).
(Additional reporting by Elizabeth Pineau; Editing by Greg Mahlich)