A year ago D/C sold off 7.5% of its original stake in EADS. Now it is selling off another 7.5%, a high proportion of it going to State-owned German banks.
The proposed deal has some decidedly odd features:-
"DaimlerChrysler AG (nyse: DCX - news - people ) said it is cutting its EADS NV holding to 15 pct from 22.5 pct by transferring a 7.5 pct stake to a pool of investors in a 1.5 bln eur deal.
"The transaction will be executed in the first quarter of 2007."
So far so good - but D/C are creating a new structure that puts their EADS involvement at 'arm's length' from their mainstream activities:-
"Under the deal, DaimlerChrysler has placed its entire 22.5 pct equity interest in EADS into a new company. A consortium of investors will then acquire a one-third interest in this new company through another entity which would be specifically created for this transaction.
"This one-third interest in the new company effectively represents a 7.5 pct stake in EADS, the statement said.
"DaimlerChrysler will receive around 1.5 bln eur in return for the indirect ownership, it said."
Beyond that, they appear to be offering the new investors almost a 'double your money' guarantee of an artificially high return - presumably as compensation for the high risk of EADS failing to pay dividends at anything like 'normal' levels for the next few years:-
"As compensation for the indirect nature of the stake, DaimlerChrysler will give the investors a preference dividend on the stake, equivalent to 175 pct of the normal EADS dividend."
Next, D/C has reserved the right to dissolve the new structure and for it - or the German, or the French governments - to buy out the new investors any time after 2010:-
"DaimlerChrysler has the option of dissolving the new structure on July 1, 2010 at the earliest.
"If it does so, DaimlerChrysler has the right to pay the investors either with cash or EADS shares. In the latter case, the German government and Sogeade -- which represents the French government and Lagardere -- will have the right to acquire EADS shares first in order to retain the shareholding balance between the German and the French side."
Finally, it's clear from the release that one at least of the objects of the deal is to increase, not decrease, the leverage of the German government in resisting any proposed economies that affect employment at the German end of Airbus:-
"A German government spokesman said under the deal, Germany's interest is now 'better positioned' in the face of an impending 'difficult' negotiation pertaining to Airbus' cost cutting programme Power8."
Pretty clear that D/C wants to reduce its exposure to EADS/Airbus as much as possible - and that the German Government is determined to retain as much 'control' as it can.
Looks to me as if this deal as a whole can only INCREASE political interference in the running of EADS/Airbus, and therefore make recovery even more difficult to achieve. What do other people think?