Thwarted BAe may block sale of 5% Airbus stake to Alenia

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The Independent Online

BAE Systems warned yesterday that it could block the sale of a stake in Airbus to Alenia following the merger of the Italian aerospace group with the Franco-German dominated European Aeronautics Defence and Space Company (EADS).

Sir Dick Evans, BAe's chairman, said that as a 20 per cent shareholder in Airbus it had a veto over any changes in the shareholder structure of the consortium.

"If we thought the sale of a stake to Alenia would damage the long-term interests of Airbus or BAe Systems, we would seek to find some long-term alterative," he said.

EADS, which owns 80 per cent of Airbus, beat BAe Systems in the battle to secure an alliance with Alenia. As part of the deal it is planning to sell the Italian group a 5 per cent stake in Airbus and move some production from France and Germany to Alenia's aerostructures factories near Naples.

Sir Dick said Alenia would have to pay "the going rate" for its Airbus stake, and he hoped the tie-up between EADS and Alenia would not delay moves to convert Airbus into an integrated commercial company.

Commenting on BAe's failure to secure a deal with Alenia, he added: "It is something we would have liked to have done but not at any price. Our difficulty was finding a deal that would deliver shareholder value."

He also rejected suggestions that the EADS-Alenia tie-up had left BAe further isolated in Europe. "The course we are steering gives us a firm footing in both Europe and the United States. We are quite comfortable with that."

Although BAe is keen to expand its transatlantic links, Sir Dick played down reports that it was seeking a merger with Boeing. "We want to continue working with Boeing but we haven't got a particular plan for a merger. We want to be equally careful to ensure we have a relationship with Lockheed Martin. That is one reason we teamed up with them on the Joint Strike Fighter, because it was seen that we were becoming overly dependent on Boeing."