* Core shareholders reach agreement on new structure
* Franco-German parity at 12 percent each
* EADS to propose buyback of up to 15 pct of shares
* Daimler starts 1.6 bln-euro share placing
By Tim Hepher and Elizabeth Pineau
PARIS, Dec 5 Nations in EADS agreed on
the biggest shake-up of the European aerospace group since it
was founded over a decade ago, opting after years of uneasy
cohabitation to put its board and most of its shares beyond
The accord to wind down a complex Franco-German
power-sharing pact came weeks after talks broke down to merge
the group with UK arms firm BAE Systems, but took
advantage of much of the groundwork for the failed $45 billion
It will lead to a simplified management structure including
a new chairman heading a mainly independent board, and a gradual
exit by core industrial shareholders that represented French and
German interests in EADS since its birth in 2000. The previous
shareholder pact had been blamed for making the company too
political and tying the hands of its management.
"This new agreement protects the interests of France,
Germany and Spain while giving the company the freedom for
manoeuvre it needs to pursue its development," French President
Francois Hollande said in a statement.
France and Germany have agreed to control 12 percent each of
the voting rights, handing Berlin a direct stake in the Airbus
parent company for the first time. Spain will also have a
slightly reduced stake of around 4 percent.
Until now, parity in EADS - born from a merger of French,
German and Spanish interests - had been ensured through a
shareholder pact between the French state, French media firm
Lagardere and German car firm Daimler AG.
The deal to revamp control of the maker of Airbus jetliners,
Ariane rockets and Eurofighter combat jets followed a 90-hour
negotiating marathon near the Champs-Elysees in Paris between
European governments, banks and industrial shareholders.
Daimler immediately announced it would sell some of its
shares in EADS to German state-owned development bank KfW
as part of an overall reduction of its 15 percent stake
in the European aerospace group.
The car firm kicked off a 1.6 billion-euro placing of 61.1
million shares or around 7.5 percent of the company. Sources
said the shares were being offered from 26.25 euros.
EADS closed up 2.5 percent at 27.23 euros
($35.58)on Wednesday, having risen all week on hopes the
restructuring would make EADS easier to manage.
EADS also set out plans to buy back up to 15 percent of its
shares in two equal tranches - one mainly reserved for Lagardere
and the other available to all shareholders.
The plans are subject to approval by shareholders in an
extraordinary meeting likely to be held in early March.
France agreed to give up veto powers over the company's
industrial policy and none of the governments will have such
rights, but sensitive defence interests will be ring-fenced.
However, a French official said President Hollande had
agreed in a "frank" meeting with EADS Chief Executive Tom Enders
on Wednesday that Enders would give a "regular account" on
company activities to senior ministers every eight months or so.
Enders denied this left the door open to interference.
"I had a very good, open meeting with the president," Enders
told Reuters in an email.
"He suggested that we stay in touch and meet from time to
time to be updated on important developments and to discuss how
the government can support the company. This should obviously
happen also on the level of ministers. So no 'reporting' but
very welcome dialogue with an important stakeholder."
"The state veto powers were hardly ever used but the
management knew they were there," said Agency Partners analyst
Nick Cunningham, referring to the previous shareholder pact.
"This will allow them to run EADS more like a normal
company, though there are still tight limits to that given the
very high political profile and substantial defence activities."
To allow Germany on board, the amount of EADS directly owned
by taxpayers will actually rise to 28 percent from 20 percent as
a result of the deal, though this is well below the current
combined block of governments and proxies. EADS said the free
float, or those shares available to the public, would now rise
to 70 percent from 49 percent.
Much of the deal was inspired by complex negotiations to
merge EADS and BAE, a potential tie-up that was blocked by
Germany in October.
EADS strategy chief Marwan Lahoud, seen as one of the main
architects of both deals, said the failure of the BAE talks had
exposed weaknesses in EADS that all sides wanted to fix.
"What the BAE failure has shown is that you have to approach
first things first," Lahoud told reporters.
"If you want to run a strategic transaction, assuming it
makes sense, you need to start by putting the governance right."
Enders said the new governance structure amounted to
"EADS-BAE but without BAE".
However, EADS reiterated it had no plans to revive the BAE
merger plan as it embarks on a long-term review of its strategy.