EADS nears factory deals
PARIS (Reuters) - Airbus parent EADS (EAD.PA) on Friday seemed close to two deals to spread the hefty cost of the next Airbus.
EADS and British aerospace group GKN (GKN.L) are close to a deal for GKN to take control of an Airbus wings factory at Filton in Britain, sources briefed on the matter said.
The deal could be finalized around the time of the July 14-20 Farnborough air show, one of the sources said, asking not to be identified. EADS and GKN both declined comment.
EADS said it was in exclusive talks with private French aerospace group Daher to sell it a majority stake in its general aviation unit EADS Socata.
EADS has been edging towards deals with GKN and Daher for months as it seeks partners to share the 10 billion euro ($15.70 billion) cost of the next Airbus, the mid-sized A350 which will include costly composite materials.
"Bringing together Daher and EADS Socata would allow the creation of a major actor in the area of aerostructures and business aviation and develop joint projects in these two areas, in particular with regards to the A350 for which EADS Socata Daher would be a tier one partner," an EADS statement said.
A tier one supplier is part of the inner circle of senior sub-contractors and in turn farms out work to other suppliers.
Socata's CEO Jean-Michel Leonard said in January that the company, based at Tarbes at the foot of the Pyrenees mountains, had an exclusive deal with Daher to bid for packages of work on the A350, needing investment of 100 million euros from Socata.
A confirmed role on the A350 would lift recent doubts over the future of Socata, a 97-year-old company which built the first plane to cross the Mediterranean.
Socata's aircraft such as the recently unveiled 6-7 seat TBM 850 are at the opposite end of the scale from Airbus jetliners, ranging up to the A380 superjumbo, and are aimed at businesses and wealthy owner-pilots.
The TBM series has brought once loss-making Socata into a small profit in the past four years. But EADS Chief Executive Louis Gallois said in January it could not manage without outside support.
It has expertise in fuselage construction but lacks the financial muscle needed to keep up with demand for fuel-saving lightweight materials.
Socata's revenues of 220 million euros in 2006 come equally from small plane production like the TBM, about 80 percent of whose sales are in the United States, and sub-contracting on fuselages and other structures.
Plans to sell larger Airbus factories in France and Germany flopped in June due to the credit crunch and weak dollar.
Daher is one of two companies which had been seen as a potential future partner for Socata, the other being Italian firm Piaggo, whose Avanti aircraft rivals the TBM.
(Reporting by Tim Hepher; Editing by Paul Bolding)
