When the Indian government named the Dassault Rafale as the low-cost bidder in the country’s Medium Multirole Combat Aircraft competition, it was a big setback for losing contender Eurofighter.
In particular, the outcome was seen as a setback for EADS, whose Cassidian unit led the campaign. U.K. officials have not been shy in expressing frustration over the German-led effort and suggested that if the talks were reopened -- if contract talks between New Delhi and Dassault stall -- they would push aggressively for a better offer.
But how much of a loss did EADS really suffer in the MMRCA program? Perhaps less than many suspect.
EADS holds a 46% share in the Eurofighter consortium, but also controls 46.3% of Dassault Aviation shares. When word of the Rafale win broke, Dassault’s share price spiked (in part because of the relatively small free-float), in effect adding around €1 billion to the valuation of the company on the day.
“On that day, we lost and gained €500 million,” EADS CEO Louis Gallois quips when asked yesterday about the MMRCA competition as the company released its full-year results.