EADS governance and shareholding structure receives major overhaul

EADS board and the company's core shareholders agreed (05-Dec-2012) on a revised shareholding and governance structure. The present shareholder pact is expected to be replaced by a normal company governance scheme, aimed at normalising and simplifying governance while securing a shareholding structure that allows France, Germany and Spain to protect strategic interests. Core industrial shareholders Daimler and Lagardere will largely reduce their stakes. The German and French states intend to ultimately hold up to 12% each, with Spain controlling around 4%. EADS intends to propose a share buy-back of up to 15% of outstanding shares - subject to market conditions and shareholder approval. The free float of EADS shares should ultimately increase from 49% to over 70%. Subject to regulatory conditions and to Germany (through Kreditanstalt für Wiederaufbau (KfW), the government investment arm) acquiring an initial block of 5% of EADS, an EGM will be held during 1H2013, to vote on the proposed changes to the articles of association, on the proposed share buy-back and to elect new directors.

New shareholding structure and governance:

• France and Germany intend to build equal ownership positions, while the present core industrial shareholders, Daimler and Lagardere, are provided with a path to partially divest and will eventually be free to trade their shares at their discretion;
• Present shareholder pact to be terminated and replaced by a new, limited arrangement between the French, German and Spanish governments, subject to a vote at the 1H2013 EGM;
• France, Germany and Spain agreed on a capped government shareholding of 12%, 12% and 4%, respectively. The three states will have reciprocal pre-emption rights. Amended articles of association of EADS will contain and ownership and voting restriction from crossing the 15% threshold by shareholder, individually or collectively;
• The three states have agreed that, upon the request of any of them, they would vote against a future change to a limited number of the new governance provisions;
• Future EADS board will comprise 12 members. The majority of directors as well as two thirds of the members of the executive committee will be EU nationals;
• Certain specific French and German national security interests will be protected through the creation of 'national defence companies';
• Under the new governance scheme, no veto right will be given to any group of directors in the board or to any shareholder at the shareholders' meeting.

Under core shareholding and share buy-back changes, Daimler and Lagardere will substantially reduce their participation in EADS - either immediately or in the near future.

• Disposal by Daimler: Reduce its shareholding in EADS by up to 7.44% of the share capital before the end of 2012. KfW to buy approximately 2.76%. In parallel, and at a price determined by reference to the contemplated transaction with Daimler AG, KfW intends to buy the privately-held interests in the Dedalus consortium, which owns a total of 7.44% of EADS' share capital. Ultimately, KfW, together with other German public entities currently holding interests in Dedalus, will thus own a total economic interest of 10.2% percent in EADS1 (corresponding to 12% after completion of the up-to-15% share buy-back if at maximum level);
• Share buy-back: EADS intends to implement a share buy-back programme and subsequent cancellation of up to 15% of the outstanding EADS shares, divided into two equal and simultaneous tranches bearing the same terms and conditions. First tranche of up to 7.5% will be open to all of EADS' shareholders, other than the parties to today's agreement. The second tranche of up to 7.5% will be reserved exclusively for Lagardere up to 5.5%. If the size of the tranche is higher than this, French state holding company SOGEPA and Spanish state holding company SEPI will have the right to tender the remainder (based on their pro rata ownership of EADS shares unless they agree otherwise). In the event SOGEPA and SEPI do not exercise their right, Lagardere could take the full amount of the tranche. If the tranche is not fully tendered by the above parties, Daimler will have the right to participate up to the full unused amount of the tranche. [more - original PR] [more - original PR - II]