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BAE investors approve sale of Airbus stake, ending partnership

BAE investors approve sale of Airbus stake, ending partnership

Shareholders of BAE Systems Plc, the UK partner in Airbus SAS, approved the sale of the company's 20 percent stake in the world's biggest maker of civil aircraft, ending a 27-year partnership.
Proxy votes representing 70 percent of BAE's stock approved selling the Airbus holding to European Aeronautic, defense & Space Co., the planemaker's other owner, for 2.75 billion euros (US$3.5 billion), according to figures released in advance of a floor vote at a special shareholders meeting in London.
The Airbus stake, which has generated 360 million pounds (US$677 million) in profit for London-based BAE over the past three years, "was a wonderful investment, but a portfolio investment," Chairman Dick Olver said at the meeting. "This was a moment in history when it was right to move."
BAE, Europe's biggest weapons maker, is selling the stake in Toulouse, France-based Airbus to expand defense interests in the U.S. as the planemaker faces delays and rising costs on the 555-seat A380 airliner and investment in the new A350XWB aircraft. Under the terms of a 2001 accord, EADS has 10 days to pay for the purchase.
BAE in June exercised a put option requiring EADS to buy the shareholding. The company initially questioned an independent valuation from Rothschild Group that priced the stake at 2.75 billion euros, 21 percent less than the book value, after failing to agree on a price with EADS.
BAE on September 6 recommended that shareholders approve the sale to avoid future risks and expenses at Airbus. BAE will receive 1.78 billion euros, after repaying loans owed to Airbus, and return as much as 500 million pounds to shareholders in a buyback. The company also will consult trustees of its pension funds about further contributions.


Updated : 2021-04-11 05:16 GMT+08:00