Daimler has sold its stake that remains in European Aeronautic, Defence & Space Co. for EUR2.2 billion ($2.9 billion) as part of its plan to focus on its auto operations. Daimler said in a statement that it sold 61.1 million shares in EADS, which accounts for 7.5 percent of the total, at EUR37 per share. EADS purchased 16 million of the shares for EUR600 million.
Daimler, which is one of the founding members of EADS, has been trailing rival premium carmakers BMW and Audi in vehicle sales. Daimler chief executive Dieter Zetsche has pledged to close the gap by launching a line-up of new Mercedes-Benz models. Daimler pushed back its profit targets in October 2012 and has commenced a cost-cutting plan in Europe.
Sascha Gommel, an analyst with Commerzbank, remarked that Daimler’s EADS stake sale secures a stable dividend payment for 2013, adding that it is better for the carmaker to invest the money in its core business or to spend it to the benefit of the shareholders in the form of dividend payment.
Daimler disclosed in March that it will book EUR2.7 billion in non-cash operating profit gain in the second quarter thanks to a re-evaluation of the remaining 7.5 percent stake in EADS it placed. Daimler already sold 7.5 percent of its stake for EUR1.66 billion in December 2012.
Daimler Chief Financial Officer Bodo Uebber, a former EADS chairman, remarked that the carmaker will invest the proceeds of the sale in the global growth of their divisions and the extension of their technological leadership. He added that Daimler is pursuing a corporate strategy with a “clear focus on automotive products and services." EADS shareholders agreed in March to change the shareholder structure, paving the way for Daimler and French publisher Lagardere to divest their stakes.