France, Germany arm-wrestling over EADS

27th November 2006, Comments 0 comments

FRANKFURT, Nov 27, 2006 (AFP) - The French government is seeking to take control of European aerospace giant EADS by pushing for a capital increase to finance development of the new A350 long-haul jet, German newspapers reported on Monday.

FRANKFURT, Nov 27, 2006 (AFP) - The French government is seeking to take control of European aerospace giant EADS by pushing for a capital increase to finance development of the new A350 long-haul jet, German newspapers reported on Monday.

Paris surprised the industrial shareholders of the European Aeronautic Defence and Space Company — namely DaimlerChrysler which holds a stake of 22.5 percent and French group Lagardere which holds 7.5 percent — by proposing a capital hike to finance the A350, the business daily Handelsblatt reported.

The newspaper said that DaimlerChrysler and Lagardère both rejected the idea. But if the capital increase went ahead and they refused to participate, then France, which holds 15 percent of EADS via Sogeade, would effectively gain a dominant position in the company's share capital.

A supervisory board meeting to discuss the financing of the A350 last Friday was therefore postponed, Handelsblatt reported, quoting sources close to DaimlerChrysler and Lagardere.

The Financial Times Deutschland, quoting French aerospace industry sources, talked of "blackmailing by Paris".

FT Deutschland said that a spokesman for EADS declined to comment.

Handelsblatt said that the aim of the French government was to prevent a far-reaching and painful restructuring of EADS's troubled aircraft maker Airbus.

Copyright AFP

Subject: French news

0 Comments To This Article