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BAe In Talks To Sell Out Of Airbus  
User currently offlineNAV20 From Australia, joined Nov 2003, 9909 posts, RR: 36
Posted (8 years 5 months 6 days 6 hours ago) and read 5347 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?


"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
12 replies: All unread, jump to last
 
User currently offlineDAYflyer From United States of America, joined Sep 2004, 3807 posts, RR: 3
Reply 1, posted (8 years 5 months 6 days 6 hours ago) and read 5319 times:

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


One Nation Under God
User currently offlineNAV20 From Australia, joined Nov 2003, 9909 posts, RR: 36
Reply 2, posted (8 years 5 months 6 days 6 hours ago) and read 5319 times:

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


"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
User currently offlineRichardPrice From , joined Dec 1969, posts, RR:
Reply 3, posted (8 years 5 months 6 days 5 hours ago) and read 5248 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.


User currently offlineArt From United Kingdom, joined Feb 2005, 3382 posts, RR: 1
Reply 4, posted (8 years 5 months 6 days 5 hours ago) and read 5193 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


User currently offlineMutu From United Kingdom, joined Mar 2006, 536 posts, RR: 0
Reply 5, posted (8 years 5 months 5 days 23 hours ago) and read 5031 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

User currently offlineNAV20 From Australia, joined Nov 2003, 9909 posts, RR: 36
Reply 6, posted (8 years 5 months 5 days 20 hours ago) and read 4899 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).



"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
User currently offlinePM From Germany, joined Feb 2005, 6887 posts, RR: 63
Reply 7, posted (8 years 5 months 5 days 14 hours ago) and read 4818 times:

Quoting NAV20 (Reply 6):
BAe

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


User currently offlineA319XFW From , joined Dec 1969, posts, RR:
Reply 8, posted (8 years 5 months 5 days 14 hours ago) and read 4809 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 


User currently offlineN328KF From United States of America, joined May 2004, 6484 posts, RR: 3
Reply 9, posted (8 years 5 months 5 days 14 hours ago) and read 4780 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.



When they call the roll in the Senate, the Senators do not know whether to answer 'Present' or 'Not guilty.' T.Roosevelt
User currently offlinePM From Germany, joined Feb 2005, 6887 posts, RR: 63
Reply 10, posted (8 years 5 months 5 days 13 hours ago) and read 4762 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


User currently offlineAstuteman From United Kingdom, joined Jan 2005, 10000 posts, RR: 96
Reply 11, posted (8 years 5 months 5 days 13 hours ago) and read 4724 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


User currently offlineNAV20 From Australia, joined Nov 2003, 9909 posts, RR: 36
Reply 12, posted (8 years 5 months 5 days 11 hours ago) and read 4654 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



"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
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