SPECIAL REPORT : Aerospatiale Matra, Dasa To Merge
PARIS, Oct. 14 ---While observers were expecting Aerospatiale Matra and DaimlerChrysler Aerospace to announce this week that they had finalized the merger of their space units, the two companies instead said they would merge across the board to create the world's third-largest aerospace manufacturer.
The merger had been reported as being under discussion several times since the beginning of the year, but its timing was unexpected.
The details of the complex ownership structure appear to have been well worked out, down to the new company's logo, but the merger's implementation will likely prove to be a regulatory and management challenge. Aerospatiale and Matra are still working to implement their own merger, which was made official in June, while Dasa is working out details of its own takeover of Spain's CASA, also announced in June.
We reproduce below the official communiques published on the merger.
Also see related stories by Agence France Presse in our AFP Section.



Statements

Statement By DaimlerChrysler Aerospace

Statement By French Prime Minister's Office

Statement By Aerospatiale Matra

British Aerospace Welcomes Merger








Statement By French Prime Minister's Office

(Source : French Prime Minister's Office ; issued Oct.14 in French only) (unofficial translation follows)


PARIS, le 14 octobre 1999 ---Une étape décisive de l'intégration de l'industrie aéronautique européenne civile et militaire va être franchie par le regroupement d'Aérospatiale-Matra et de DASA. Le Gouvernement se félicite de cette avancée qui entre dans le cadre politique fixé par la déclaration des Chefs d'Etat et de Gouvernement du 9 décembre 1997.
En effet, l'Etat et le groupe Lagardère d'une part, Daimler-Chrysler d'autre part, ont élaboré un projet industriel visant à rassembler l'ensemble de leurs activités aéronautiques civiles et militaires. Ce projet permettra de rassembler, au sein d'une société unique, les compétences françaises et allemandes en matière d'aviation civile et militaire, d'hélicoptères, de missiles, de lanceurs spatiaux et de satellites. La nouvelle entreprise sera le premier constructeur aéronautique en Europe et l'un des tout premiers mondiaux.
Aérospatiale-Matra et DASA organiseront leur union de manière équilibrée. La partie française et le groupe Daimler-Chrysler détiendront ensemble, à parité, 60% de la future société, les 40% restants étant placés sur le marché. En ce qui concerne la partie française, elle sera constituée à hauteur de 50% par l'Etat, qui demeurera ainsi le premier actionnaire français, par le groupe Lagardère à hauteur de 37% et par des investisseurs financiers français.
Ainsi, le nouvel ensemble sera durablement contrôlé par un actionnariat stable et de long terme. Ces actionnaires de contrôle seront liés par des accords de partenariat, au terme desquels chacun d'entre eux sera associé aux principaux choix stratégiques de la nouvelle entreprise. Les dispositions nécessaires seront prises afin de garantir les intérêts de défense. Cette opération permet de créer un ensemble industriel puissant et durablement ancré en Europe. Elle renforcera Airbus et favorisera le regroupement de ses activités industrielles. Elle s'inscrit pleinement dans la perspective d'une défense européenne en construction. Elle s'appuie sur une volonté politique partagée de renforcer les liens industriels et de défense entre la France et l'Allemagne. Ainsi, les accords conclus permettent d'assurer que le regroupement des forces en Europe puisse se réaliser dans le respect des intérêts nationaux et européens. Elle offre au nouveau groupe des moyens technologiques, industriels et financiers à la hauteur de grands projets d'avenir, porteurs de développement et d'emplois. Sur ces bases, après consultation des représentants des salariés, les modalités de l'opération seront mises au point dans les meilleurs délais et le projet sera soumis aux instances compétentes.


Unofficial Translation by defense-aerospace.com :

A decisive step towards the integration of Europe's civil and mlilitary aerospace industry will be taken with the regrouping of Aerospatiale-Matra and Dasa. The Government approves of this advance, that conforms to the political framework defined by the joint statement of Chiefs of State and Heads of Government of December 9th, 1997.
The [French] State and the Lagardère Group, on the one hand, and DaimlerChrysler, on the other hand, have agreed on an industrial project intended to assemble their civil and military interests in the aerospace field. This project will allow the consolidation, in a single company, of French and German know-how in the areas of civil and military aviation, helicopters, missiles, space launchers and satellites. The new company will be Europe's largest aerospace manufacturer and a world leader.
Aerospatiale Matra and Dasa will organize their union in a balanced way. The French side and DaimlerChrysler will each own 30 % of the future company, for a combined total of 60%, while the remaining 40% will be publicly traded. The French stake will be split between the French state, which with 50 percent will remain the largest French shareholder, the Lagardere Group with 37% and French financial investors for the balance.
Thus, the new company will be durably controlled by stable, long-term shareholders. These controlling shareholders will be linked by partnership agreements according to which they will share in major strategic decisions for the new company. Appropriate steps will be taken to guarantee defense interests.
This operation allows the establishment of a powerful industrial entity durably anchored in Europe. It will reinforce Airbus and favor the regrouping of its industrial activities. It fully conforms to the perspective of the construction of a European defense identity. It is founded on the shared political will to reinforce defense and industrial links between France and Germany. Thus, these agreements will allow the consolidation of European forces to conform to national and European interests. It ensures that the new group will have the technological, industrial and financial capabilities needed to carry forward major future projects that will generate growth and employment.
On this basis, and after consultation of employee representatives, the details of the operation will be defined as soon as possible, and the project will be submitted to the appropriate regulatory authorities.

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British Aerospace Welcomes
Aerospatiale Matra & DaimlerChrysler Aerospace Merger

(Source : British Aerospace ; issued Oct. 14)


British Aerospace today welcomed the announcement of a merger between Aerospatiale Matra and DaimlerChrysler Aerospace - the latest move towards integration of the aerospace and defence industry in Europe.

The integration of these businesses creates a stronger partner and offers the potential to enhance the competitiveness of the joint ventures and the many collaborative programmes in which British Aerospace is involved.

The merger is a very helpful step towards the creation of the Airbus Industrie Single Corporate Entity (SCE). Only a bilateral negotiation between British Aerospace and the new merged company now remains to be concluded before the highly desirable SCE can be realised.

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Statement By Aerospatiale Matra

(Source : Aerospatiale Matra ; issued Oct.14)

AEROSPATIALE MATRA and DASA merge their activities
to create the European Aeronautical, Defense and Space Company (EADS)


Aerospatiale Matra welcomes the agreement between French State, Lagardère SCA and DaimlerChrysler AG announcing the combination of Aerospatiale Matra and DaimlerChrysler Aerospace (DASA) activities to create the European Aeronautical, Defense & Space (EADS) company.
The creation of this company marks an essential step forward in the consolidation of the European aerospace and defense industry.
It also confirms the achievement of the objective announced at the creation of Aerospatiale Matra by Aerospatiale and Lagardère on July 23, 1998 : to facilitate, based on this industrial project, the consolidation of the European aerospace and defense industry that was originally launched on December 9, 1997 by Germany, the United Kingdom and France.
Over the years, Aerospatiale Matra and DASA have built the foundations for European collaboration by forming jointly-owned companies, in particular Airbus, Eurocopter and Astrium. The integration of the two companies is therefore very solidly anchored.
EADS will be the world's third largest aerospace and defense company, with 1998 pro forma sales of 19.8 billion euros and 89,000 employees.
In 1998, the new company would have generated operating income of approximately 1 billion euros.
EADS is the European leader in civil aviation, helicopters, launch vehicles, satellites and missile systems. It is also a top-tier player in all global markets.
The new company plays a pivotal role in both European restructuring and transatlantic cooperation : In the space industry, the creation of Astrium should soon be expanded to encompass Alenia Spazio. As for missile systems, discussions are going on between Aerospatiale Matra, British Aerospace and Finmeccanica in order to create a European missile company on a par with the world leader. Lastly, EADS, along with British Aerospace and CASA, wishes to form quickly a new integrated Airbus company.
In line with its goal of creating value for shareholders, EADS's management will maximize the synergies generated by the new company. By increasing market shares and business volume, management will also improve operational profitability. The initial objective set for Aerospatiale Matra of an operating margin of 8 percent will be exceeded within the next five years.
Forty percent of EADS's capital will be floated on the market, to ensure the liquidity of the share and make it more attractive to investors. The shares will be listed on both the Paris and Frankfurt stock exchanges. The remaining 60 percent of the capital will be held equally by DaimlerChrysler and by a group of shareholders comprising Lagardère SCA, the French government and private French financial institutions.
The share offering is scheduled for spring 2000.
In a joint statement, Yves Michot, Chairman of Aerospatiale Matra, and Philippe Camus, Chief Executive, said : "We are very pleased to be taking this major step forward in our strategy of creating a premier European group, a leader in its markets, that will satisfy the expectations of customers, shareholders and employees alike."

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