Reported plans to streamline the ownership structure of EADS are
unlikely to “materially improve corporate governance issues at the
aerospace company,” according to Fitch Ratings (ATW Daily News, Nov. 21).
“The changes will not alter the perception that EADS is a state-controlled corporation, which restricts its chances of winning large export defense contracts, but they would bolster the finances of major shareholder Daimler,” the ratings agency said.
It argued that the complex arrangement of state control at EADS, through both direct and indirect shareholdings, was “a key factor in the collapse of EADS’ attempted merger with BAE Systems in September.” This was also a major barrier to EADS winning defense contracts as a prime contractor in the US, Fitch said.
Although details of a potential new ownership pact between the French and German governments are still unclear, the ratings agency does not expect a change in the shareholding structure to reduce state influence “to a level that would remove it as an obstacle in future sector consolidation or in tendering for large defense contracts in markets like the US.”
Germany controls 22.5% of EADS through Daimler, which holds 15% and also controls the voting rights of a consortium of private and public investors that holds a further 7.5%. France has an equal stake, through the government’s 15% stake combined with a 7.5% stake held by French conglomerate Lagardere.
“The changes will not alter the perception that EADS is a state-controlled corporation, which restricts its chances of winning large export defense contracts, but they would bolster the finances of major shareholder Daimler,” the ratings agency said.
It argued that the complex arrangement of state control at EADS, through both direct and indirect shareholdings, was “a key factor in the collapse of EADS’ attempted merger with BAE Systems in September.” This was also a major barrier to EADS winning defense contracts as a prime contractor in the US, Fitch said.
Although details of a potential new ownership pact between the French and German governments are still unclear, the ratings agency does not expect a change in the shareholding structure to reduce state influence “to a level that would remove it as an obstacle in future sector consolidation or in tendering for large defense contracts in markets like the US.”
Germany controls 22.5% of EADS through Daimler, which holds 15% and also controls the voting rights of a consortium of private and public investors that holds a further 7.5%. France has an equal stake, through the government’s 15% stake combined with a 7.5% stake held by French conglomerate Lagardere.
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