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.
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 Ã©tape dÃ©cisive de l'intÃ©gration de l'industrie aÃ©ronautique europÃ©enne civile et militaire va Ãªtre franchie par le regroupement d'AÃ©rospatiale-Matra et de DASA. Le Gouvernement se fÃ©licite de cette avancÃ©e qui entre dans le cadre politique fixÃ© par la dÃ©claration des Chefs d'Etat et de Gouvernement du 9 dÃ©cembre 1997.
En effet, l'Etat et le groupe LagardÃ¨re d'une part, Daimler-Chrysler d'autre part, ont Ã©laborÃ© un projet industriel visant Ã rassembler l'ensemble de leurs activitÃ©s aÃ©ronautiques civiles et militaires. Ce projet permettra de rassembler, au sein d'une sociÃ©tÃ© unique, les compÃ©tences franÃ§aises et allemandes en matiÃ¨re d'aviation civile et militaire, d'hÃ©licoptÃ¨res, de missiles, de lanceurs spatiaux et de satellites. La nouvelle entreprise sera le premier constructeur aÃ©ronautique en Europe et l'un des tout premiers mondiaux.
AÃ©rospatiale-Matra et DASA organiseront leur union de maniÃ¨re Ã©quilibrÃ©e. La partie franÃ§aise et le groupe Daimler-Chrysler dÃ©tiendront ensemble, Ã paritÃ©, 60% de la future sociÃ©tÃ©, les 40% restants Ã©tant placÃ©s sur le marchÃ©. En ce qui concerne la partie franÃ§aise, elle sera constituÃ©e Ã hauteur de 50% par l'Etat, qui demeurera ainsi le premier actionnaire franÃ§ais, par le groupe LagardÃ¨re Ã hauteur de 37% et par des investisseurs financiers franÃ§ais.
Ainsi, le nouvel ensemble sera durablement contrÃ´lÃ© par un actionnariat stable et de long terme. Ces actionnaires de contrÃ´le seront liÃ©s par des accords de partenariat, au terme desquels chacun d'entre eux sera associÃ© aux principaux choix stratÃ©giques de la nouvelle entreprise. Les dispositions nÃ©cessaires seront prises afin de garantir les intÃ©rÃªts de dÃ©fense. Cette opÃ©ration permet de crÃ©er un ensemble industriel puissant et durablement ancrÃ© en Europe. Elle renforcera Airbus et favorisera le regroupement de ses activitÃ©s industrielles. Elle s'inscrit pleinement dans la perspective d'une dÃ©fense europÃ©enne en construction. Elle s'appuie sur une volontÃ© politique partagÃ©e de renforcer les liens industriels et de dÃ©fense entre la France et l'Allemagne. Ainsi, les accords conclus permettent d'assurer que le regroupement des forces en Europe puisse se rÃ©aliser dans le respect des intÃ©rÃªts nationaux et europÃ©ens. Elle offre au nouveau groupe des moyens technologiques, industriels et financiers Ã la hauteur de grands projets d'avenir, porteurs de dÃ©veloppement et d'emplois. Sur ces bases, aprÃ¨s consultation des reprÃ©sentants des salariÃ©s, les modalitÃ©s de l'opÃ©ration seront mises au point dans les meilleurs dÃ©lais et le projet sera soumis aux instances compÃ©tentes.
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 LagardÃ¨re 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.
-ends-Â Â Â Â
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, LagardÃ¨re 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 LagardÃ¨re 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 LagardÃ¨re 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."