Daimler rules out the sale of a minority stake in EADS to suppliers

Article by Christian Andrei, on May 23, 2011

Daimler AG confirmed that it has dropped a plan to sell a minority stake in EADS, an aerospace group, to Germany-based suppliers, the company’s chief financial officer Bodo Uebber disclosed to the Frankfurter Allgemeine Sonntagszeitung.

Uebber is also the chairman of EADS. Uebber denied speculations that certain German suppliers including Diehl and MTU could obtain a 7.5 percent stake that Daimler is seeking to sell, the newspaper reported.

The newspaper also quoted him as saying that the action was “completely unreasonable” because it “harbors too many conflicts of interest.”

Moreover, he denied any option related to selling shares back to EADS, stating that the money the aerospace group has is not meant for this, and also that it would weaken EADS. He added that the company would be better off putting the money into developing business.

On another note, the newspaper stated that Uebber seemed to consider it an obligation of the government of Germany to assist in finding a stable shareholder structure.

According to Uebber, the aerospace group’s success is highly dependent on the cooperation with countries. He added that the state is a vital client as well as partner in pre-financing, and without it, no aircraft will be able to take off.

Currently, Daimler has a 15 percent share of EADS and administers a 7.5 percent stake held by a consortium of banks, giving it the same politically sensitive weight that the French state and French media group Lagardere together own.

With no German private-sector investor in sight for the stake up for sale, the German state may step into the deal even if there are some reservations about the matter in the Berlin coalition.

Topics: daimler

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