Ownership Stabilizes, But Privatization May Be Set Back

German carmaker Daimler has sold half its 15 percent stake in EADS, which it's been trying to do for some time, and those shares will remain in Germany, preserving the national balance of ownership. But the German government itself is the buyer, discouraging to those who had hoped to see EADS make progress in moving into the private sector.

Reuters reports that EADS CEO Louis Gallois is publicly expressing satisfaction with the move, saying, "The decision clarifies the evolution of the controlling shareholding in Germany and ends some uncertainty." The comment is on contrast to those of Airbus CEO Tom Enders, who called the transfer of shares to Germany's state bank, KfW, a move "completely the wrong direction."

The ownership structure of EADS is more complicated than some private corporations. The company was a merger of interests from Germany, France and Spain formally completed in late 1999, and is structured to make transferring shares difficult to avoid a takeover. This pact has made it difficult for partners to liquidate their shares to address changing circumstances.

FMI: www.eads.com