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France would keep stake in merged EADS-BAE: paper
September 14, 2012 / 6:11 PM / 5 years ago

France would keep stake in merged EADS-BAE: paper

PARIS (Reuters) - France wants to remain a shareholder if European aerospace company EADS EAD.PA and British defense group BAE Systems (BAES.L) merge, French newspaper La Tribune reported on Friday, citing two unidentified sources close to the matter.

France, which owns 15 percent of EADS, “does not want to get out of EADS”, the two sources were quoted as saying. Its 15 percent stake would give it 9 percent of the combined group.

A spokeswoman for BAE said the issue for the company was the voting block and not the size of the stake.

“On this, our position is that it is the voting block rights that have to go for this deal to succeed. We need a normalized structure with normal shareholder rights,” the spokeswoman said.

The government declined to comment on the newspaper report.

A French presidential source said France and Germany would not make any decisions until the companies clarified the terms.

“We are letting the companies find solutions if they agree on a tie-up, and it is only once we have the project as it has been clarified by the groups that we will have the task of judging it and making decisions, both Germany and France,” the source said.

“Along with (German Chancellor Angela) Merkel, we are waiting for the evaluation of all the consequences of this tie-up, as much on the civil side as on the military side.”

Former defense minister Paul Quiles, a leading member of the ruling Socialist Party’s leftwing, told Reuters the possibility of the state giving up its stake in EADS was hugely sensitive.

“If the creation of this EADS-BAE holding raised the question of the state’s exit, there would be a battle in the heart of the Socialist Party. That is for sure,” he said.

The government has not come out against or in favor of a merger between BAE and EADS, which are in advanced talks to create an industry grouping that would overtake U.S. rival Boeing (BA.N) in sales and contend better with defense cutbacks in Europe and the United States.

”It is hard to imagine the French state would want to exit from EADS just to make BAE happy. That would surprise me,“ Quiles said. ”If that were the case, I think that would be a mistake.

La Tribune also said EADS chief executive Tom Enders would head a merged group as chief executive, while its chairman would come from BAE. The paper said if talks continued at their current pace, a deal could be signed before October 10.

EADS was not available to comment.

Reporting by Emmanuel Jarry and Elizabeth Pineau; Additional reporting by Astrid Wendlandt; Writing by Leigh Thomas and James Regan; Editing by Mark Potter and Dan Lalor

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