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Topic: BAe In Talks To Sell Out Of Airbus
Username: NAV20
Posted 2006-03-21 15:20:47 and read 5317 times.

This seems to confirm the earlier rumours.

"EADS, the European aerospace and defence company, is drawing up plans to use its €5.5bn (£3.8bn) cash pile to buy out BAE Systems' 20% stake in Airbus, the world's leading plane-maker, industry sources said yesterday. The minority stake is conservatively valued at €3.5bn. EADS owns the remaining 80%.

"It is understood that executives from the two groups have held informal talks and investment bankers are being considered for a deal that could fuel BAE's hunt for acquisitions in the US where it is the Pentagon's fifth-largest arms supplier."


http://business.guardian.co.uk/story/0,,1726490,00.html

Would this have any direct effect on employment within the UK? As I understand it, the Airbus factories in the UK are owned by 'Airbus UK,' not by BAe? So presumaby there'd be no immediate effect?

Topic: RE: BAe In Talks To Sell Out Of Airbus
Username: DAYflyer
Posted 2006-03-21 15:25:06 and read 5289 times.

This is a good time to sell with porfits going up. They can maximize the asking price right now.

Topic: RE: BAe In Talks To Sell Out Of Airbus
Username: NAV20
Posted 2006-03-21 15:27:00 and read 5289 times.

Yep - EADS share-price at an all-time high.

Topic: RE: BAe In Talks To Sell Out Of Airbus
Username: RichardPrice
Posted 2006-03-21 15:49:45 and read 5218 times.

Quoting NAV20 (Thread starter):
Would this have any direct effect on employment within the UK? As I understand it, the Airbus factories in the UK are owned by 'Airbus UK,' not by BAe? So presumaby there'd be no immediate effect?

BAE is only selling its share in Airbus (potentially), Airbus isnt changing its supplier (BAE). The employment situation shouldnt really change unless Airbus changes suppliers for the parts BAE produces, which is unlikely in the short to midterm.

Topic: RE: BAe In Talks To Sell Out Of Airbus
Username: Art
Posted 2006-03-21 16:04:38 and read 5163 times.

From the Reuters website:

"BAE Systems, Europe's largest defence firm, said on Tuesday it had no plans to bid for U.S. group L-3 Communications or to sell its stake in plane maker Airbus, denying a newspaper report."

"The Guardian had reported that BAE Systems was considering a $10 billion (5.7 billion pound) bid for L-3 Communications to strengthen its position in the U.S. military market.

The newspaper said BAE was expected to fund the deal by selling its 20 percent stake in European plane maker Airbus, which it estimated would fetch between 3 billion pounds and 4 billion pounds."

http://investing.reuters.co.uk/inves...1_NOA130044_RTRUKOC_0_ARMS-BAE.xml

Topic: RE: BAe In Talks To Sell Out Of Airbus
Username: Mutu
Posted 2006-03-21 22:12:38 and read 5001 times.

I seem to recall reading that this whole issue is a red herring. It is IMHO nothing more than a chane in accounting requirements that has triggered the "intelligent" press to jump to conclusions. From this financial year onwards EADS is required to account differently for the BAe stake in Airbus. Up to now the minority interest was stripped out by allocating Bae 20% share of the profits as a charge against group profits. Now EADS can claim 100% of the profits BUT must show a liability in its balance sheet representing the value of its "assets/profits" efectively owned by a third party. As a consequence this (estimated) e3.5bn becomes a liability on the EADS balance sheet which wasnt previously required. The valuation exercise (which appears to be the source of this rumour) is required to establish the quantum of the liability for EADS audited finncial statements

Topic: RE: BAe In Talks To Sell Out Of Airbus
Username: NAV20
Posted 2006-03-22 01:23:35 and read 4869 times.

Art, the story is sourced to EADS - they haven't denied it. Nor has BAe, actually - an un-named 'spokesman' saying, "It is simply not correct. It is way off target.." is not a full-blown denial.

Mutu, the rumours about BAe selling out have been around for quite some time; about as long as the similar ones about Daimler-Chrysler wanting to sell its 30% shareholding. I think it's more likely that the balance sheet adjustment you mention was made to recognise BAe's 'put option' as a liability. If EADS hadn't done that, and they DO have to buy out BAe this financial year, the purchase would presumably have had to be shown as a revenue item in the current year (which would likely have eliminated EADS' 2006 profit).

Topic: RE: BAe In Talks To Sell Out Of Airbus
Username: PM
Posted 2006-03-22 06:56:10 and read 4788 times.

Quoting NAV20 (Reply 6):
BAe

The company hasn't actually been BAe for many years. It's BAE Systems.

Topic: RE: BAe In Talks To Sell Out Of Airbus
Username: A319XFW
Posted 2006-03-22 07:02:17 and read 4779 times.

Quoting PM (Reply 7):
The company hasn't actually been BAe for many years. It's BAE Systems.

It's actually BAE SYSTEMS - should all be in capitals, apparently!  wink 

Topic: RE: BAe In Talks To Sell Out Of Airbus
Username: N328KF
Posted 2006-03-22 07:20:01 and read 4750 times.

Personally, I think it would be a great strategic move for Northrop Grumman or Lockheed to buy that 20% stake. It would lessen the impression of Airbus as being "French," and would give Northrop additional leverage in the A330MRTT bid for the USAF.

With that said, the writing has been on the wall on this for a long time. Recent moves such as the BAE divestiture of some of its Airbus-supplying plants to Spirit only served to make it more obvious.

Topic: RE: BAe In Talks To Sell Out Of Airbus
Username: PM
Posted 2006-03-22 07:50:08 and read 4732 times.

Quoting A319XFW (Reply 8):
It's actually BAE SYSTEMS - should all be in capitals, apparently!

True enough. I just thought it would sound like SHOUTING in my original post!  Wink

Topic: RE: BAe In Talks To Sell Out Of Airbus
Username: Astuteman
Posted 2006-03-22 08:26:39 and read 4694 times.

Quoting A319XFW (Reply 8):
It's actually BAE SYSTEMS - should all be in capitals, apparently!

Quite correct, although the vast majority of employees still call it Bae.  Smile
Except in our yard, of course - we'll always be the "Vickers" shipyard, no matter who owns it  Wink

A

Topic: RE: BAe In Talks To Sell Out Of Airbus
Username: NAV20
Posted 2006-03-22 10:10:48 and read 4624 times.

Quoting Astuteman (Reply 11):
we'll always be the "Vickers" shipyard, no matter who owns it

Good to hear that the old names are still holding on, Astuteman. Having lived near Hatfield for a time in my childhood, I still tend to think of 'BAe' as being mostly De Havilland.....  Smile

Looks like there'll be an added bonus (to those blessed with a sense of humour) if this deal goes through. HM Government are going to look like absolute prats......

"The government is gravely worried about any move defence company BAE Systems might make to sell its stake in European civil aircraft manufacturer Airbus.

"Ministers expressed deep reservations about any potential sale of BAE's 20 per cent holding in the Toulouse-based company at a recent cabinet subcommittee meeting on aerospace and industry issues.

"Defence Secretary Geoff Hoon and Trade and Industry Secretary Patricia Hewitt are concerned that any divestment would simply be a move by BAE to cash in on the current success of Airbus - which has overtaken Boeing to become the world's leading manufacturer of civil aircraft - while the going is good.

"Ministers believe that such a move would put the short-term interests of BAE shareholders before the longer-term interests of one of the UK's few successful industrial sectors. They also suspect that a sale would be used simply as a way of raising cash to make acquisitions in the United States - which chief executive Mike Turner believes is the best strategy for BAE's future growth - and are exasperated at the idea of BAE selling off their most successful asset for this purpose.

"Another reason for government concern would be that it has paid out a total of £780 million in launch aid for Airbus's most recent plane, the A380 superjumbo, of which £530m went to BAE."


http://politics.guardian.co.uk/economics/story/0,11268,1418390,00.html


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