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Aircraft industry

German Banks Near Deal to Buy Stake in EADS Amid Daimler's Reduced Holding

Strategic Insights

— 1 min read

As the German government aims to keep a major stake in European Aeronautic Defense & Space (EADS) in German hands, major German banks are nearing a deal to purchase a stake in the company. This move is part of a plan to reduce DaimlerChrysler's holding in EADS, which owns the aircraft manufacturer Airbus. The talks, involving Daimler, German lenders including Deutsche Bank, Commerzbank, WestLB, and KfW, are reportedly "making good progress." The German government hopes to maintain a counterweight to French holdings in EADS, which include both Lagardere and the government.

Key Takeaways:

  • The German government is close to finalizing a deal with major German banks to buy a stake in EADS, which owns the aircraft manufacturer Airbus.
  • DaimlerChrysler is reducing its holding in EADS from 22.5% to 15%, with the goal of shedding 7.5% of the shares.
  • The German government wants to keep the shares in EADS in German hands as a counterweight to French holdings.
  • Airbus is predicting a surge in demand for its jets, with 5,400 more orders than previously forecasted, worth approximately $2.6 trillion by 2025.
  • The company anticipates delivering a record 425 planes in 2006, maintaining a lead over Boeing for the fifth consecutive year.
  • Daimler's plans to reduce its shareholding in EADS were delayed due to the likelihood of factory closings and job cuts at Airbus.
  • FedEx, an airfreight giant, canceled its order for a cargo version of the A380, but Airbus' chief operating officer, John Leahy, stated that no more customers are likely to cancel their orders for the plane.

Statistics:

  • EADS predicts 22,700 new airliner orders by 2025, worth approximately $2.6 trillion.
  • Airbus is forecasting a record 425 plane deliveries in 2006.
  • The company has captured about 36% of new orders this year, compared to Boeing's 64% market share.
  • Boeing has sold more expensive large and midsize planes, leading to Airbus' relatively lower market share.

Sources:

  • Reuters
  • Bloomberg
  • DaimlerChrysler
  • European Aeronautic Defense & Space (EADS)
  • Airbus
  • WestLB (Deutsche Bank, Commerzbank, KfW)

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