BAE will decide on Italian Airbus stake

The European Aeronautic Defence and Space Company (EADS) needs the consent of BAE Systems before it can grant a promised 5% stake in the European airliner builder Airbus Industrie to Italy’s Finmeccanica, John Weston, BAE Systems chief executive, said last week.

Weston contradicted previous statements by France’s Aerospatiale Matra, one of the companies merging to form EADS, that it would not need BAE System’s approval.

A BAE Systems spokesman this week confirmed that the proposed 5% equity in Airbus would come from the Eads partners – Spain’s Casa, German company DaimlerChrysler Aerospace and Aerospatiale Matra – but added: `This will still require the agreement of BAE Systems.’

The EADS partners own 80% of Airbus while BAE Systems, which builds the wings, has 20%. Finmeccanica is the state-owned holding company that controls Italian aerospace firm Alenia, which would be taking the stake in Airbus. Finmeccanica has a 50% share in the new EADS partnership.

BAE had made an intense effort to attract Finmeccanica into an alliance, strengthening its credentials as a key player in the consolidation of the European aerospace industry.

Finmeccanica’s proposal for a 50% share in the alliance was the key sticking point for BAE chairman Sir Richard Evans, who said that ownership structure would not deliver shareholder value.

The company had hoped to combine the marketing of its Hawk jet trainer with Alenia’s MB-339 trainer in an effort to dominate the world jet trainer market.

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