Road Paved for EADS Official Formation

Farnborough 2000 is a celebration of the formation of the European Aeronautic Defence and Space Company (EADS), which marks the first true large-scale international consolidation of the aerospace industry.

With all regulatory approvals in hand, EADS will now be officially formed and its stock floated on Europe's stock exchanges in the next few weeks.

While EADS is truly international, combining the aerospace and defense assets of DaimlerChrysler, Aerospatiale Matra, and CASA of Spain, the largest single share will be held by Germany's DaimlerChrysler.

EADS will be the world's third largest aerospace company, with annual revenues in excess of $19 billion. It is expected to be far easier to put together than U.S. mega-companies such as Boeing-McDonnell Douglas as its three partners already achieve more than 70% of their respective revenues in common structures.

In global terms, EADS will be:

• No. 2 in commercial aircraft, with an 80% share in Airbus;
• No. 1 in helicopters, with 100% share in Eurocopter;
• No. 3 in military transport aircraft with the A400M program and the C212, CN-235 and C-295 medium transports;
• No. 2 in guided missiles, with a goal of overtaking Raytheon;
• No. 1 in commercial space launcher systems and a leading global supplier of satellites, with 75.5% of Astrium, and 25.9% of Arianespace; and
• A leader in military aircraft, with 43% of Eurofighter and 45.8% of Dassault.

Formation of EADS has paved the way for other major consolidations. A joint venture between EADS and Finmeccanica will pool all the military aircraft assets of both firms, giving the proposed European Fighter Company 67% of the Eurofighter Typhoon program, with the likelihood of Dassault joining later.

Also high on the agenda is conversion of the Airbus consortium into a proper company.
EADS will float some 34% of its shares in a public offering in the next few weeks. The remainder will be owned by a holding company in which Dasa and a French group (comprising Lagadere, Banque National de Paris and the French state) have equal stakes, and the Spanish state investment arm SEPI will have 8.4%. Co-chairmen are Dasa's Manfred Bischoff, and Jean-Luc Lagadere.