EADS Courts Alenia For Military Tie-Up

Asian Aerospace 2000 -- In a bid to lure Alenia away from the advances of BAE Systems, EADS (the new European Aeronautic, Defense and Space Company) has made the Italian firm a joint venture proposal on military projects.

Alenia is the last major European aerospace and defense firm to remain outside the two competing industrial blocks of EADS and BAE Systems, and both are eager to win its favor. EADS (comprised of France's Aerospatiale Matra, Germany's DaimlerChrysler and Spain's Casa) proposes grouping Alenia's fighter aircraft operations with EADS' own, and there is already considerable crossover between the two. Alenia, for example holds 21% of the four-nation Eurofighter program of which it is a member alongside DaimlerChrysler and Casa.

If the three were to join forces this would see BAE Systems, once the leading shareholder in the Eurofighter consortium, reduced to minority status. Alenia has tie-ups with both Aerospatiale Matra and DaimlerChrysler in regional aircraft and missile development too.

The EADS proposal was made to Italy's state holding company Istituto per la Ricostruzion Industriale SpA, which owns 54% of the Finmeccanica group. Finmeccanica, in turn, owns Alenia. EADS proposes that the new joint venture be up and running within a matter of months.

The Italian government is currently drawing up plans to sell its majority stake in Finmeccanica by June 2000, and a move to privatize Alenia would fit that overall plan.