BAE Confirms Rumors It Is Looking To Sell Airbus Stake

Confirming a rumor that began to circulate last month, British defense and aerospace company BAE Systems PLC confirmed Friday it is in discussions to sell off its 20 percent interest in European aircraft maker Airbus.

BAE, which currently owns the only stakes in Airbus not under the control of the European Aeronautic Defense and Space company, or EADS, is negotiating with the Franco-German group about the sale. EADS has made no secret of its desire to take over full control of the aircraft maker.

"We believe that now is the right time for us to divest our Airbus shareholding to allow us to concentrate on our core trans-Atlantic defense and aerospace strategy," BAE Chief Executive Mike Turner said in a statement reported by the Associated Press.

EADS recently valued BAE's stake in the European consortium at 3.5 billion euros, or about $4.3 billion US -- a high price, said one analyst.

However, "EADS has always wanted Airbus," said analyst Edmund Shing at Kepler Equities to the AP.

The selloff comes as BAE looks to build on its presence in the US defense market. Selling its shares in Airbus gives BAE funds to possibly buy up other defense companies in order to meet that goal.

News of a potential selloff caused workers at a BAE plant in Britain to call for emergency talks with the company, as they face possible job losses among 13,000 workers employed at the plant that makes wings for Airbus airliners.

"We want to find out if production will remain in the U.K. or whether it will be shifted to countries where the new buyers are based," said Ian Waddle, national officer of the Amicus union.

FMI: www.baesystems.com, www.airbus.com