Russian State Bank Buys 5% Stake In Eads - Report

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Lumberton
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Russian State Bank Buys 5% Stake In Eads - Report

Tue Aug 29, 2006 7:01 pm

http://business.scotsman.com/latest.cfm?id=1273482006

Quote:
MOSCOW (Reuters) - Russian state bank Vneshtorgbank (VTB) has accumulated a 5 percent stake in European aerospace firm EADS, the maker of Airbus planes, business daily Vedomosti reported on Tuesday.

Quoting sources close to the bank and government officials, the paper said the former Soviet foreign trade bank, which is Russia's second-largest bank, spent around $1 billion (527 million pounds) buying EADS shares on the market.

Officials at both companies were not immediately available for comment.

If true, would this be enough for a seat on the board?

[Edited 2006-08-29 12:02:16]
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nighthawk
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RE: Russian State Bank Buys 5% Stake In Eads - Report

Tue Aug 29, 2006 7:49 pm

I wonder what effect this will have on marketing the airbus aircraft in russia? I believe Russia charges very high import tax on western aircraft, to encourage airlines to buy russian.

With the russians now owning a share in airbus, they will want their investment to pay off. Will they reduce taxes on airbus aircraft to give the company a greater market share in russia?
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RichardPrice
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RE: Russian State Bank Buys 5% Stake In Eads - Report

Tue Aug 29, 2006 8:02 pm

Quoting Nighthawk (Reply 1):
Will they reduce taxes on airbus aircraft to give the company a greater market share in russia?

With their effort to join the WTO in full swing, I highly doubt they would do something like that.

It would be interesting to see how it affects purchases by state owned/operated airlines.
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Joni
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RE: Russian State Bank Buys 5% Stake In Eads - Report

Tue Aug 29, 2006 8:31 pm

Buying into EADS is something Russia would like to so, since it's a company of the type Russians like: huge, almost monopolistic and works on a field that's of interest both politically and militarily in addition to economic significance. It may also be political overture toward the EU and a signal of possible future co-operation or deals in a multi-polar type of world.
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bill142
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RE: Russian State Bank Buys 5% Stake In Eads - Report

Tue Aug 29, 2006 8:40 pm

Quoting Nighthawk (Reply 1):
With the russians now owning a share in airbus,

No they own a share of EADS, Airbus' parent. It is a different scenario to owning a stake in Airbus as this purchase may be strategic in terms of having access to military technology.
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Halibut
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RE: Russian State Bank Buys 5% Stake In Eads - Report

Tue Aug 29, 2006 8:49 pm

Quoting Lumberton (Thread starter):
Russian State Bank Buys 5% Stake In Eads - Report

More political intervention ? . Something Airbus/EADS has enough of " Bureaucracy " ! I can only see this as making things more complicated .

Halibut
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EI321
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RE: Russian State Bank Buys 5% Stake In Eads - Report

Tue Aug 29, 2006 9:35 pm

Quoting Nighthawk (Reply 1):
I wonder what effect this will have on marketing the airbus aircraft in russia? I believe Russia charges very high import tax on western aircraft, to encourage airlines to buy russian.

With the russians now owning a share in airbus, they will want their investment to pay off. Will they reduce taxes on airbus aircraft to give the company a greater market share in russia?

There would be questionmarks surrounding the legalities of a situation where only Airbus aircraft are exempt from or benifit from a reduction in such taxes.
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Lumberton
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RE: Russian State Bank Buys 5% Stake In Eads - Report

Tue Aug 29, 2006 11:33 pm

Just curious...is this on par with the Spanish share in EADS?
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EI321
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RE: Russian State Bank Buys 5% Stake In Eads - Report

Tue Aug 29, 2006 11:47 pm

Quoting Lumberton (Reply 7):
Just curious...is this on par with the Spanish share in EADS?

Do you mean the size of the spanish share? SEPI (a spanish state holding company) own 5.51%.
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Lumberton
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RE: Russian State Bank Buys 5% Stake In Eads - Report

Tue Aug 29, 2006 11:52 pm

Seems like the markets welcome the news.
http://biz.yahoo.com/rb/060829/airlines_russia_eads.html?.v=5

Quote:
EADS shares were up 2.4 percent at 23.18 euros at 0900 GMT after having risen as much as 3 percent earlier on the report.
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Jet-lagged
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RE: Russian State Bank Buys 5% Stake In Eads - Report

Wed Aug 30, 2006 1:11 pm

Intriguing stuff . . . . unless this is purely an investment play, the possibilities and questions are exciting.

Could this impact A320 manufacturing in China?
Is this a chip to play, for better terms on Airbus/A350 involvement?
Will BAE offload their equity to the bank?
If moves are made for significant stake or a acquisition, would France fight it like Mittal for Arcelor?
Will Boeing be pressured to do more manufacturing or sourcing in Russia?
Is this how Russia gets back big in the commercial aircraft game?

This could be very interesting to watch!
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bigsmile
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RE: Russian State Bank Buys 5% Stake In Eads - Report

Wed Aug 30, 2006 7:20 pm

heres another link about the news.

http://www.telegraph.co.uk/money/mai...l=/money/2006/08/30/cnrussia30.xml


Now with the UK (BAE Systems) pulling out of Airbus could this mean that Russia takes their place. If so, this could mean alot of the A350 work and that of future aircraft being given to Russia.

[Edited 2006-08-30 12:28:25]
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Lumberton
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RE: Russian State Bank Buys 5% Stake In Eads - Report

Wed Aug 30, 2006 7:25 pm

Quoting Jet-lagged (Reply 10):
Is this how Russia gets back big in the commercial aircraft game?
This could be very interesting to watch!

What about the implications for defense technology "sharing"?
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EI321
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RE: Russian State Bank Buys 5% Stake In Eads - Report

Wed Aug 30, 2006 7:45 pm

Quoting Jet-lagged (Reply 10):
Could this impact A320 manufacturing in China?

I dont think it would be enough to see the A320 plant moved from China to Russia, but it will probably lead to increased Airbus parts manufacturing in Russia. There is also the furthcoming A320F conversion programme in Russia & the possible A340/A330 freighter programme for which Russian is a prime candidate.
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Jet-lagged
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RE: Russian State Bank Buys 5% Stake In Eads - Report

Wed Aug 30, 2006 7:48 pm

Quoting Lumberton (Reply 12):
What about the implications for defense technology "sharing"?

Dicey question. Could this lead to Russia joining NATO - to be part of the 'team'.

Heck, Europe would probably like to be more independent of U.S. military products anyway, both for themselves, and for the business opportunities.

My guess is the first step is just a means towards Airbus and/or commercial airplanes . . . . EADS is too sensitive for now, and is only the initial and temporary investment vehicle.
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par13del
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RE: Russian State Bank Buys 5% Stake In Eads - Report

Wed Aug 30, 2006 8:33 pm

Quoting Jet-lagged reply 14
"Heck, Europe would probably like to be more independent of U.S. military products anyway, both for themselves, and for the business opportunities."

Other than F-16 a/c, some of which are manufactured locally, the major military powers in the EU have very little US equipment, what they do have are specialized equipment like AWACS a/c. Other than that, they have their own homegrown ships, tanks, rifles, aircraft, bombs, ammunition. Indeed during the cold war the Soviets regarded this interdependence of various countries different equipment as a weakness.

I would think this purchase is more political for the Russians, however, if the French are stubborn about it - as usual -, the impact may not be what the Russians expect. It would show that the Russians are more interested in a Greater Europe than they are given credit for.
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keesje
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RE: Russian State Bank Buys 5% Stake In Eads - Report

Thu Aug 31, 2006 1:07 am

Smart move by the Russians anyway. Many lost their head in the "A380 delays drag Airbus into hell emo / hype / hope" of a few months ago.

Smart people didn't loose track, saw that (apart from the stock prize/ a few heads that had to roll) nothing much had changed really & bought  Wink

https://www.airliners.net/discussions...ion/read.main/2824231/6/#ID2824231
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Lumberton
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RE: Russian State Bank Buys 5% Stake In Eads - Report

Thu Aug 31, 2006 1:10 am

I started a thread here to discuss possible impact on future U.S. Defense related business. There are numerous articles today speculating that the Russian involvement could have unintended consequences for EADs. We'll have to wait and see. Will Russian Eads Ownership Hurt Tanker Prospects? (by Lumberton Aug 30 2006 in Military Aviation & Space Flight)
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keesje
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RE: Russian State Bank Buys 5% Stake In Eads - Report

Thu Aug 31, 2006 5:00 am

Maybe the Russians will buy 5% of Boeing or Lockheed tommorow. They are sitting on an oil/gas bubble.

We have to Ignite a New Era of Global Economic Growth through Free Markets and Free Trade, stimulating democracy all over the world.
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Joni
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RE: Russian State Bank Buys 5% Stake In Eads - Report

Sat Sep 02, 2006 7:40 pm

Quoting Nighthawk (Reply 1):
I wonder what effect this will have on marketing the airbus aircraft in russia? I believe Russia charges very high import tax on western aircraft, to encourage airlines to buy russian.

"Russia mulls easing of plane import tariffs-paper":

http://yahoo.reuters.com/news/articl...51_L01547903&type=comktNews&rpc=44
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hb88
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RE: Russian State Bank Buys 5% Stake In Eads - Report

Mon Sep 04, 2006 5:39 am

Remember people, EADS is not Airbus and Airbus is not EADS.

The divisions of EADS are Airbus, Military Transport Aircraft, Eurocopter, Space and Defence & Security Systems.
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Joni
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RE: Russian State Bank Buys 5% Stake In Eads - Report

Mon Sep 11, 2006 6:53 pm

Here is a longer analysis of this deal:

http://yahoo.reuters.com/news/articl...13&WTModLoc=HybArt-C1-ArticlePage2

It looks like at least some analysts think EADS can win extra business in Russia as a result.
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