DaimlerChrysler lowers stake in Airbus parent

By Michael Shields, European Auto Correspondent

FRANKFURT (Reuters) - DaimlerChrysler has placed 7.5 percent of EADS with a public-private consortium in a 1.5-billion-euro ($1.95 billion) deal that maintains the Franco-German balance of power at the aerospace firm.

The world's fifth-biggest carmaker, DaimlerChrysler said on Friday the placement, which has been in the works for months, would effectively reduce its EADS stake to 15 percent but leave it with the voting rights on the full 22.5 percent. The company says it wants to focus on its core businesses.

The deal is designed to safeguard German influence in EADS at a time of major restructuring that could cost thousands of jobs at its Airbus subsidiary.

French Prime Minister Dominique de Villepin met the co-chief executive of EADS and head of Airbus, Louis Gallois, on Friday. He reiterated to Gallois the importance of evenly splitting any Airbus job cuts between countries, Villepin's office said in a statement. Germany's economy minister, Michael Glos, will see Gallois next week.

A German government spokesman said Daimler's deal should strengthen Germany's hand in talks over the restructuring amid union fears of up to 10,000 job cuts. EADS is expected to unveil details of its Power8 restructuring plan on February 20.

DaimlerChrysler shares hit a high of 49.78 euros and closed up 3.2 percent at 49.55, the leading gainer in the German blue-chip index DAX, which was up 0.5 percent.

EADS shares closed down 1.6 percent at 24.87 euros.

SHARING THE BURDEN

"This has broadly been expected," said Peter Rieth, analyst at BHF capital management.

EADS plunged into crisis last year after production problems delayed the flagship Airbus A380 superjumbo, costing it almost 5 billion euros in future profits.

As cuts at EADS loom, Germany fears ceding too much influence to France. The French government and French media firm Lagardere together own 22.5 percent of EADS.

France's Villepin also discussed the Airbus situation with German Chancellor Angela Merkel and again stressed the need for cost cuts to be evenly split between countries.

"They reaffirmed the need for close Franco-German co-operation based on two principles: an equal share of the impact of the plans on each partner country ... and a timetable and procedures which leave time for a serious dialogue with the social partners," Villepin's office said.

Goldman Sachs analyst Sash Tusa has said seven of Airbus's 16 major manufacturing sites could be sold, including four in Germany, two in France and one in Spain.

DEAL STRUCTURE