UPDATE 1-Germany reduces order for helicopters from EADS

Fri Mar 15, 2013 12:07pm EDT

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By Sabine Siebold

BERLIN, March 15 (Reuters) - Germany's defence ministry said on Friday it would buy around a third fewer transport and military helicopters from European aerospace and defence company EADS than originally planned, though it would buy an additional 18 navy helicopters.

Shrinking German defence orders have been a source of tension between EADS and the Berlin government, which recently blocked EADS' efforts to merge with BAE Systems.

The Defence Ministry said in a statement it had agreed with Eurocopter, a unit of EADS, to reduce its order of NH-90 transport helicopters to 82 from 122, and its order of Tiger military helicopters to 57 from 80.

"Through the restructuring of the contract, the German military will also receive 18 navy helicopters," the ministry said.

Germany, keen to reduce its debt pile as the euro zone crisis drags on, is trying to cut major defence orders as part of sweeping reforms of the military.

Christoph Mueller, spokesman for Eurocopter, hailed Friday's agreement as a "clear win-win situation for both sides".

"We had tough but decidedly constructive negotiations ... (and the deal) has produced a credible and durable solution," Mueller said.

Neither side would comment on the value of the deal. The original plans had been estimated to cost several billion euros.

Eurocopter, which is also the world's No. 1 civil helicopter maker, expects its overall deliveries to increase by 15 percent this year from 475 in 2012 thanks partly to demand from the oil and gas sector.

Last year, Eurocopter's revenue rose 15 percent to 6.3 billion euros ($8.5 billion). The company makes about half its revenue from helicopter sales, while most of the rest is from services such as engine maintenance and training. (Reporting by Sabine Siebold; Writing by Sarah Marsh and Gareth Jones; Editing Christoph Steitz and Mark Potter)

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