Sat, Apr 08, 2006
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.
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