(public limited company)
|Traded as||Euronext: EAD
CAC 40 Component
|Founded||10 July 2000|
|Headquarters||Toulouse, France and Leiden, Netherlands|
|Key people||Denis Ranque (Chairman)
Dr Tom Enders (CEO)
|Revenue||€49.13 billion (2011)|
|Operating income||€1.696 billion (2011)|
|Profit||€1.033 billion (2011)|
|Total assets||€88.48 billion (end 2010)|
|Total equity||€8.87 billion (end 2010)|
|Owner(s)||SOGEADE (22 %)
Daimler AG (15 %)
SEPI (5 %)
|Employees||133,115 (end 2011)|
The European Aeronautic Defence and Space Company N.V. (EADS) is a global pan-European aerospace and defence corporation registered in the Netherlands and a defence and military contractor worldwide. The group includes Airbus which manufactures commercial aircraft, and Airbus Military which manufactures tanker, transport and mission aircraft; Eurocopter, the world's largest helicopter supplier; Astrium, providing systems for aerial, land, naval and civilian security applications including Ariane, Galileo and Cassidian. Through Cassidian, EADS is a partner in the Eurofighter consortium as well in the missile systems provider MBDA. In 2011, the EADS generated revenues of €49.13 billion and employed 133,115 personnel. EADS was formed on 10 July 2000 by the merger of Aérospatiale-Matra, DaimlerChrysler Aerospace AG (DASA), and Construcciones Aeronáuticas SA (CASA). Overall, the company develops and markets civil and military aircraft, as well as communications systems, missiles, space rockets, satellites, and related systems. In 2013, it was announced that EADS is to change its name to Airbus Group.
- 1 History
- 2 Organisation
- 3 Corporate governance
- 4 Financial information
- 5 Criticisms
- 6 See also
- 7 Notes
- 8 External links
In June 1997, British Aerospace Defence Managing Director John Weston commented "Europe... is supporting three times the number of contractors on less than half the budget of the U.S." European governments wished to see the merger of their defence manufacturers into a single entity, a European Aerospace and Defence Company.
As early as 1995 the German aerospace and defence company DaimlerChrysler Aerospace (DASA) and its British counterpart British Aerospace were said to be eager to create a transnational aerospace and defence company. The two companies envisaged including the French company Aérospatiale, the other major European aerospace company, but only after its privatisation. The first stage of this integration was seen as the transformation of Airbus from a consortium of British Aerospace, DASA, Aérospatiale and Construcciones Aeronáuticas SA into an integrated company; in this aim BAe and DASA were united against the various objections of Aérospatiale. As well as Airbus, British Aerospace and DASA were partners in the Panavia Tornado and Eurofighter Typhoon aircraft projects. Merger discussions began between British Aerospace and DASA in July 1998, just as French participation became more likely with the announcement that Aérospatiale was to merge with Matra and emerge with a diluted French government shareholding. A merger was agreed between British Aerospace Chairman Richard Evans and DASA CEO Jürgen Schrempp in December 1998. However when the British General Electric Company put its defence electronics business Marconi Electronic Systems (MES) up for sale on 22 December 1998, British Aerospace abandoned the DASA merger in favour of purchasing its British rival. The merger of British Aerospace and MES to form BAE Systems was announced on 19 January 1999 and completed on 30 November. Evans stated in 2004 that his fear was that an American defence contractor would acquire MES and challenge both British Aerospace and DASA.
Formation and expansion (1999–2008)
DASA and the Spanish aircraft company Construcciones Aeronáuticas SA agreed to merge with the signature of a memorandum of understanding on 11 June 1999. On 14 October 1999 DASA agreed to merge with Aérospatiale-Matra to create the European Aeronautic Defence and Space Company. 10 July 2000 was "Day One" for the new company which became the world's second-largest aerospace company after Boeing and the second-largest European arms manufacturer after BAE Systems.
In January 2001 Airbus Industrie was transformed from an inherently inefficient consortium structure to a formal joint stock company, with legal and tax procedures being finalised on 11 July. Both EADS and BAE transferred ownership of their Airbus factories to the new Airbus SAS in return for 80 % and 20 % shares in the new company respectively. In April 2001 EADS agreed to merge its missile businesses with those of BAE Systems and Alenia Marconi Systems (BAE/Finmeccanica) to form MBDA. EADS took a 37.5 % share of the new company which was formally established in December 2001 and which thus became the world's second-largest missile manufacturer.
On 16 June 2003 EADS acquired BAE's 25 % share in Astrium, the satellite and space system manufacturer, to become the sole owner. EADS paid £84 million, however due to the lossmaking status of the company BAE invested an equal amount for "restructuring". It was subsequently renamed EADS Astrium. In November 2003, EADS announced that it was considering working with Japanese companies, and the Japanese METI, to develop a hypersonic airliner intended to be a larger, faster, and quieter, replacement for the Concorde, which was retired in October the same year.
Despite repeated suggestions as early as 2000 that BAE Systems wished to sell its 20 % share of Airbus, the possibility was consistently denied by the company. However on 6 April 2006 BBC News reported that it was indeed to sell its stake, then "conservatively valued" at £2.4 billion. Due to the slow pace of informal negotiations, BAE exercised its put option which saw investment bank Rothschild appointed to give an independent valuation. Six days after this process began, Airbus announced delays to the A380 with significant effects on the value of Airbus shares. On 2 June 2006 Rothschild valued BAE's share at £1.87 billion, well below BAE's, analysts' and even EADS' expectations. The BAE board recommended that the company proceed with the sale and on 4 October 2006 shareholders voted in favour; the sale was completed on 13 October making EADS the sole shareholder of Airbus.
Recent activities (2008–present)
On 29 February 2008, the United States Air Force awarded a $35 billion contract for aerial refueling tankers (the KC-45) to Northrop Grumman, with EADS as a major subcontractor. The contract, one of the largest created by the Department of Defence, is initially valued at $35 billion but has the potential to grow to $100 billion.
Under the contract, Northrop Grumman and EADS would build a fleet of 179 planes, based on the existing Airbus 330, to provide in-air refueling to military aircraft, from fighter jets to cargo planes. While final assembly of the craft would take place at an Airbus plant near Mobile, Alabama, parts would come from suppliers across the globe.
However, the award was protested by Boeing, the other bidder on the project, which was upheld by the GAO. In response to the new contest, on 8 March 2010, Northrop Grumman announced it was abandoning its bid for the new contract, with its CEO stating that the revised bid requirement favored Boeing. On 20 April 2010, EADS announced it was re-entering the competition and intended to enter a bid with the KC-45.
On 12 September 2012 it was reported that BAE and EADS were in discussions regarding a possible merger. In the event of the merger, BAE shareholders would own 40 % and EADS 60 % of the new enlarged organisation. A key French EADS shareholder Lagardere asked EADS to rethink the proposed merger plan as the conditions were unsatisfactory. The bosses of BAE Systems and EADS issued a joint statement seeking political support for their proposed 35 billion euro (US$45 billion) merger from the British, French and German governments; and reiterated that the combination is borne out of opportunity, not necessity and the new company would be greater than the sum of its parts. It was reported on 10 October 2012, that the merger between BAE Systems and EADS had been called off.
On 31 July 2013, it was reported that EADS was to be renamed in 2014 to Airbus Group, adopting the name of its commercial aircraft-building subsidiary.
- Cassidian Electronics – develops and manufactures sensors, radars, avionics and electronic warfare systems for military and security applications
- Cassidian Air Systems – develops manned and unmanned aerial systems (UAVs), mission avionics, electronic defence and warning systems
- Cassidian Systems – provides global security solutions such as command & control, lead system integration, TETRA and TETRAPOL communication systems for public safety, industry, transportation and defence. This line of business was the first one in the world to begin field tests with TETRA Enhanced Data Service (TEDS).
- EADS 3 Sigma – a Hellenic company focused in the design, development, production and services provision of airborne and surface target drone systems.
- EADS North America – the U.S. holding company for the North American activities of EADS.
- Dassault Aviation (46 %) – manufacturer fighters like the Dassault Rafale or the Dassault Mirage 2000.
- Eurofighter GmbH (46 %) – manufacturer of Eurofighter Typhoon.
- MBDA (37.5 %) – develops and manufactures missiles
- Patria (27 %) Finnish defence company
- ATR (50 %) – regional aircraft manufacturer
- Socata (30 %) general aviation aircraft manufacturer
- EADS EFW
- EADS Innovation Works (R&D)
- Arianespace (30 %)
- Dornier Consulting
- Premium AEROTEC
EADS' Management Structure (as of 01 April 2013): 
EADS CEO : Tom Enders
Executive Committee members:
- Airbus Military
Guillaume Faury (appointed on 30 April 2013)
- EADS North America
- EADS & Airbus
Harald Wilhelm (Chief Financial Officer)
Thierry Baril (Chief Human Resources Officer)
Marwan Lahoud (Chief Strategy & Marketing Officer)
Jean Botti (Chief Technical Officer)
The Executive Committee is appointed by the board of directors, itself appointed by Daimler AG and SOGEADE. Both appoint four directors plus one independent director. As of July 2003 SEPI no longer nominates a board member, but a Spanish director is retained as the 11th member. The board also appoints the company's chairmen, one from the Daimler nominated directors and from the SOGEADE nominated directors. In late 2004 Noël Forgeard (then Airbus CEO) was nominated by Lagardère as the next French CEO of EADS. Forgeard had suggested that this system should be abolished in favour of a single CEO in a move that DaimlerChrysler saw as an attempt to engineer a French dominated management team. Following protracted arguments, which caused embarrassment to EADS at the Paris Air Show, the appointment was confirmed by the EADS Board of Directors on 25 June 2005. At the same meeting the Board, in consultation with partner BAE Systems, named Gustav Humbert as President and CEO of Airbus.
As of September 2007 the Chairmen are Rüdiger Grube and Arnaud Lagardère. The other board members are Louis Gallois, Thomas Enders, Hans Peter Ring, Juan Manuel Eguiagaray, Michel Pébereau, Bodo Uebber, François David and Michael Rogowski.
In mid-2012, the general assembly of EADS appointed former Airbus CFO Harald Wilhelm as the new CFO of EADS, taking over for Hans Peter Ring, who will retire from the company. Arnaud Lagardère is going to be appointed as the new chairman and will succeed Bodo Uebber. Moreover, Airbus CEO Thomas Enders will possibly take over as EADS CEO and will be succeeded by current Airbus COO Fabrice Brégier.
As of 30 June 2013 72.37 % of EADS stock is publicly traded on six European stock exchanges, while the remaining 26.77 % is owned by a "Contractual Partnership". The latter is owned by SOGEPA (11.96 %), GZBV (10.69 %) and SEPI (4.12 %). SOGEPA is owned by the French State and Lagardère, while SEPI is a Spanish state holding company. France also owns 0.06 % of publicly traded stock.
In October 2005 the British Ministry of Defence warned European politicians to stop, as it sees it, interfering in the corporate governance of EADS. The former UK Defence Procurement Minister Lord Drayson hinted that the UK government, a major customer for EADS, may withhold future contracts. "As a key customer, we see it as important for EADS to move in a direction that is free from political interference."
On 4 April 2006, DaimlerChrysler announced its intention to reduce its shareholding from 30 % to 22.5 %. The company places a value of the stake at "approximately €2.0 billion." Lagardère will reduce its holding by an identical amount. However, Caisse des Dépôts et Consignations, a unit of the French government, acquired 2.25 % of EADS. At issue as a result is the fact that the German and French shareholdings are now in imbalance.
On 30 August 2006, shortly after the stock price decline caused by the A380 delivery delays, more than 5 % of EADS stock has been reportedly purchased by the Russian state-owned Vneshtorgbank. Now its share is nearly 6 %. In December 2007, Vneshtorgbank sold EADS shares to another state-controlled bank Vneshekonombank. EADS sharers are to be delivered by Vneshekonombank to the charter capital of JSC "United Aircraft Corporation" in 2008.
On 3 October 2006, shortly after EADS admitted further delays in the Airbus 380 programme would cost the company 4.8 billion euros in lost earnings in 2010, EADS shares, traded on the Paris arm of Euronext, were suspended after they surpassed the 10 % loss limit. Trading resumed later in the day with the one day loss holding at 7 %.
In 2008, EADS had arms sales equivalent of $17.9 billion, which constituted 28 % of total revenue.
Cluster bomb allegation
In 2005 the Norwegian Government Pension Fund recommended the exclusion of several companies producing cluster bombs or components. EADS and its sister company EADS Finance BV were among them, arguing that EADS manufactures "key components for cluster bombs". The criticism was centered around TDA, a joint venture between EADS and Thales S.A. TDA produced the mortar ammunition PR Cargo, which can be considered cluster ammunition, however this definition has since been successfully battled by EADS. EADS and its subsidiaries are now regarded as fulfilling all the conditions of the Ottawa Treaty. According to the new point of view, no product of EADS or its subsidiaries falls into the category of antipersonnel mines as defined by the Ottawa Treaty ("landmines under the Ottawa Treaty"). In April 2006, the fund declared that the basis for excluding EADS from investments related to production of cluster munitions is no longer valid, however its shareholding of MBDA means the fund still excludes EADS due to its indirect involvement in nuclear weapons production.
In August 2012 the UK Serious Fraud Office opened a criminal investigation into an EADS subsidiary, GPT Special Project Management Ltd, in connection with bribery allegations made by the subsidiary's former programme director, Ian Foxley. Foxley alleged that luxury cars were bought for senior Saudis, and that millions of pounds sterling was paid to mysterious Cayman Islands companies, and that this may have been done to secure a £2 billion contract to renew the Saudi Arabian National Guard's military telecommunications network. Foxley's allegations were backed up by two other GPT employees.
In 2003 Tony Yengeni, former chief whip of South Africa's African National Congress, was convicted of fraud relating to an arms deal with South Africa, in which EADS were major players, worth around $5 billion. BBC reported that EADS had admitted that it had "rendered assistance" to some 30 senior officials to obtain luxury vehicles, including defence force chief General Siphiwe Nyanda. In March 2003 the South African State completely withdrew the charges of bribery against the former head of EADS South Africa. In September 2004 the Munich prosecutor's office issued a formal order on dismissal regarding the bribery charges against him due to his innocence in relation to the said car sales (file no. 572 Js 39830/01).
Insider trading investigation
On 2 June 2006 co-CEO Noël Forgeard and Airbus CEO Gustav Humbert resigned following the controversy caused by the June 2006 announcement that deliveries of the A380 would be delayed by a further six months. Forgeard was one of a number of executives who exercised stock options in November 2005 and March 2006. He and 21 other executives are under investigation as to whether they knew about the delays in the Airbus A380 project which caused a 26 % fall in EADS shares when publicised.
The French government's actions are also under investigation; The state-owned bank Caisse des Dépots et Consignations (CDC) bought part of Lagardère's 7.5 % stake in EADS in April 2006, allowing that latter to partially escape the June 2006 losses.
In June 2008 law firm Coughlin Stoia Geller Rudman and Robbins announced that a class action suit has been commenced on behalf of an institutional investor in the U.S. District Court for the Southern District of New York on behalf of U.S. citizens who purchased the publicly traded stock of EADS.
- "EADS Financial Statements 2011". EADS. Retrieved 11 July 2012.[dead link]
- "EADS Shareholding Structure". EADS. Retrieved 1 January 2012.
- "EADS to be renamed Airbus Group". BBC News. 31 July 2013. Retrieved 31 July 2013.
- Rothman, Andrea; Landberg, Reed (1997-06-15). "Europe Defense Firms Feel Pressure to Unite". The Seattle Times. Retrieved 2007-09-12.
- "Business: The Company File: Defense merger on the radar". BBC News. 10 July 1998. Retrieved 2007-09-15.
- Jones, Adam (1999-01-20). "Europe cries foul as New BAe emerges". The Times.
- Sparaco, Pierre; Morrocco, John D. (1997-06-30). "French Government Grapples With Aerospace Strategy". Aviation Week and Space Technology (The McGraw-Hill Companies).
- Gray, Bernard; Michael Skapinker (1997-06-24). "Giant waiting in the wings: Bernard Gray and Michael Skapinker ask if Europe's defence industry can consolidate in time to challenge US dominance". Financial Times.
- "BAe and Dasa discuss proposals for merger: Aerospace groups still have 'important issues to resolve'". Financial Times. 24 July 1998. p. 1.
- Spiegel, Peter (17 July 2004). "The largest aerospace companies gather next week for the Farnborough air show but the event will be without its long-time unofficial host". Financial Times. p. 11.
- BAE Systems Annual Report 1999 22. BAE Systems plc (2000). Retrieved on 2006-10-27.
- Turpin, Andrew (4 March 2000). "BAE eyes US targets after profit rockets". The Scotsman. p. 26.
- White, David; Nicoll, Alexander (1999-06-12). "DaimlerChrysler wins fight for Spain's Casa: Deal boosts aerospace industry consolidation in Europe". Financial Times.
- Nicoll, Alexander; Skapiner, Michael (1999-10-15). "Flying in formation: The merger of DaimlerChrysler Aerospace and Aérospatiale-Matra may pave the way for a larger European grouping or the first transatlantic defence tie-up, argue Alexander Nicoll and Michael Skapinker". Financial Times.
- "History of EADS". EADS. Retrieved 2009-10-07.[dead link]
- "EADS and BAE SYSTEMS complete Airbus integration – Airbus SAS formally established" (Press release). BAE Systems plc. 12 July 2001. Retrieved 2007-10-04.[dead link]
- Sparaco, Pierre (2001-03-19). "Climate conducive for Airbus consolidation". Aviation Week & Space Technology.
- "EADS, BAE and Finmeccanica Complete MBDA Merger". Defense Daily International. 2001-12-21. "the new MBDA, the world's second largest missile manufacturer behind Raytheon"
- Odell, Mark (2003-02-01). "BAE agrees new deal for Astrium". Financial Times. p. 15.
- Spiegel, Peter (2005-09-07). "BAE denies Airbus sale plans". Financial Times.
- "BAE confirms possible Airbus sale". BBC News. 2006-04-07. Retrieved 2006-08-12.
- Gow, David (3 July 2006). "BAE under pressure to hold Airbus stake". The Guardian (UK). Retrieved 3 July 2006.
- "BAE Systems says completed sale of Airbus stake to EADS". Forbes. 2006-10-13. Retrieved 2006-10-13.[dead link]
- Dept for Communities & Local Govt: Award of state of the art IT contract to improve fire service delivery 7 March 2007, (accessed 9 March 2007)[dead link]
- "Northrop-EADS beats Boeing to build U.S. tanker". Reuters. 2008-03-01. Retrieved 2008-03-01.
- "Northrop drops out of bid to make Air Force aerial tankers", MarketWatch, 8 March 2010.
- "EADS North America intends to submit proposal for U.S. Air Force tanker "[dead link], EADS North America press release, 20 April 2010
- 'Airbus delays propel EADS to £691m loss' Daily Telegraph, 10 March 2010
- "La fusion EADS-BAE Systems sous la pression du code boursier britannique". Lemonde.fr. 2012-09-13. Retrieved 2013-06-20.
- "BAE Systems shares shed gains after EADS merger talk". BBC. 13 September 2012. Retrieved 13 September 2012.
- "Boeing Says EADS Seeking U.S. Growth With BAE Merger". Bloomberg. 13 September 2012.
- "Lagardere asks EADS to rethink BAE merger plan". Reuters. 1 October 2012. Retrieved 1 October 2012.
- "BAE and EADS chiefs: 'Time to create something stronger". Telegraph. 30 September 2012. Retrieved 1 October 2012.
- "BAE and EADS bosses plead for support for merger". Guardian. 1 October 2012. Retrieved 1 October 2012.
- "EADS and BAE: Bosses urge political support for merger". BBC. 1 October 2012. Retrieved 1 October 2012.
- "BAE-EADS merger cancelled amid political impasse". BBC. 10 October 2012. Retrieved 10 October 2012.
- BBC News - EADS to be renamed Airbus Group. Bbc.co.uk (2013-07-31). Retrieved on 2013-08-16.
- "EADS demonstrates world’s first high speed data solution over TETRA". Bapco Journal. Retrieved 12 July 2011.
- Jackson, Donny (1 March 2011). "PlantCML changes name to Cassidian". Urgent Communications. Retrieved 2011-03-18.
- "Premium AEROTEC commences aircraft component production in Romania". EADS. Retrieved 2011-03-26.[dead link]
- "Annual Report and Registration Document 2012". EADS. 1 April 2013. Retrieved 8 October 2013.
- "EADS N.V. – Board of Directors – Role and Composition". EADS. Retrieved 12 July 2011.[dead link]
- Harald Wilhelm Appointed CFO of EADS CFO Insight Magazine, Accessed 09/17/2012
- EADS Global Website - Shareholding Structure. Eads.com (2013-06-30). Retrieved on 2013-08-16.
- Roberston, David (2006-10-05). "MoD tells European leaders to stop meddling in EADS". The Times (UK). Retrieved 2006-10-15.
- DaimlerChrysler And Lagardere Cut Stake In EADS[dead link]
- "Airbus plays catch-up with A350 jet." Phillips, D. International Herald Tribune. 11 April 2006.
- "EADS shares up on Vneshtorgbank reports[dead link]." Yahoo News. 30 August 2006.
- John, Isaac. "Dubai Int'l Capital buys 3.12pc stake in EADS", Khaleej Times, 6 July 2007.
- The SIPRI Top 100 arms-producing companies, 2008 Stockholm International Peace Research Institute, 12 April 2010. Retrieved: 4 May 2010.
- "The exclusion of EADS from the investment universe of the Government Pension Fund – Global has been reviewed". Regjeringen.no. Retrieved 12 July 2011.
- "SFO launches criminal probe into deal with Saudi national guard". Exaronews.com. 2012-08-10. Retrieved 2013-06-20.
- "Third insider blows whistle on ‘corrupt’ Saudi defence deal". Exaronews.com. 2012-07-09. Retrieved 2013-06-20.
- Jailed Yengeni shows no remorse[dead link]
- "Top ANC official resigns". BBC News. 2001-10-04. Retrieved 12 July 2011.
- "Court Diary". Armsdeal-vpo.co.za. Retrieved 12 July 2011.
|Wikimedia Commons has media related to EADS.|
- Official website
- EADS North America
- Yahoo! — European Aeronautic Defence and Space Company EADS N.V. Company Profile
- Russian capital acquires large stake in EADS
- U.S.-Europe Team Beats Out Boeing on Big Contract 1 March 2008, NY Times