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European Aeronautic Defence and Space Company - EADS

With the merger of the French Aerospatiale Matra S.A. (Paris), the Spanish Construcciones Aeronáuticas S.A. (CASA, Madrid) and the German DaimlerChrysler Aerospace AG (Dasa, Munich), Europe's largest aerospace company was formed on 10 July 2000: the European Aeronautic Defence and Space Company, also known by its acronym EADS. The activities of the three founder companies in the areas of Airbus, aeronautics (military aircraft, helicopters, regional aircraft), military transport aircraft, defence and space have been concentrated in the new company. EADS will be a company according dutch law (N.V.).

EADS has organised its various business activities into five divisions - Airbus, Military Transport Aircraft, Aeronautics, Defence and Civil Systems and Space. In the Defence and Civil Systems Division, Dasa and Aerospatiale hold equal shares in the Euromissile company, which develops and produces the antitank systems HOT and Milan and also the short range antiaircraft system Roland. Under the roof of the Euromissile Dynamics Group G.I.E., in which Dasa, Aerospatiale Matra and BAE Systems each hold a one third share, the antitank guided missile systems Trigat MR and Trigat LR are undergoing development.

Aerospatiale Matra S.A. was created in 1970 by the fusion of the French state-owned companies Sud-Aviation, Nord-Aviation and Societé d'Etudes et de Réalisation d'Engins Balistiques (Sereb). The private industry Matra Group had extended its activities since the 1960's to space and defence activities. In June 1999, the state-owned Aerospatiale fused as part of its privatisation with the Matra High Technology Group, derived from the private Lagardère Group, into the Aerospatiale-Matra Concern, in which the French State (directly and indirectly) held 48 % and the Lagardère Group 33 % of the shares. 19 % of the capital was widely spread (17 % on the Stock Exchange and 2 % to the workforce).

CASA (Construcciones Aeronáuticas SA), founded in 1923, was the number 1 in the Spanish aerospace and defence industries and had participated for years in the major European programmes in this sector. As part of its privatisation, CASA was incorporated into EADS. Up to that point in time, the Spanish state holding company SEPI (Sociedad Estatal de Participaciones Industriales) held the shares in the aerospace concern. CASA is one of the market leaders for light and medium-sized military transport aircraft. In addition, it has gathered comprehensive experience in the carbon fibre compound materials. 90 % of its turnover is earned by CASA with the export of its products.

DaimlerChrysler Aerospace AG (Dasa) was founded in 1989 as Deutsche Aerospace AG. It bundled together the aeronautics and space activities of the DaimlerChrysler Concern, which held 100 % of its shares. A large part of the German aerospace industry was assimilated into Dasa. The companies Dornier (shares 57.6 %, voting rights 87.5 %), Messerschmitt-Bölkow-Blohm (MBB), MTU München and Telefunken Systemtechnik (TST) were merged. In 1997, Siemens Sicherungstechnik joined the concern. Its international competitiveness could be assured by means of the national consolidation of the German aerospace industry. Dasa generated three-quarters of its turnover in European and transatlantic cooperations. Since the foundation of EADS, the engines manufacturer MTU München is managed directly by DaimlerChrysler AG.

The merger of Martin Marietta and Lockheed Corporation in 1995 made Lockheed Martin the world's largest defense contractor. This was soon followed by the merger of Boeing along with its North American component with McDonnell Douglas Corp on 01 August 1997 increased the pressure on European defense companies to consolidate. In June 1997 British Aerospace Defense 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 defense manufacturers into a single entity, a European Aerospace and Defense Company.

In early 1997 the four Airbus partners - DaimlerChrysler Aerospace (DASA), British Aerospace Aérospatiale and Construcciones Aeronáuticas SA - had already been negotiating the transformation of Airbus. The announcement of the merger of Boeing and McDonnell-Douglas convinced them of the necessity of including military activities in the process. On 27 March 1998, they responded to the trilateral declaration with a report on founding principles for a European Aerospace and Defense Company (EADC). This report was submitted to the governments concerned as well as to Saab of Sweden and Finmeccanica of Italy; intergovernmental consultation followed in which Italy and Sweden participated.

On 09 July 1998, ministers of industry from the six countries asked the companies to settle outstanding matters as quickly as possible and to submit a second report by the end of October 1998. Beginning in September, Matra (represented by Aerospatiale), Saab and Finmeccanica took part in preparation of the document, and Dassault Aviation was associated. The second report was finally presented in mid-November 1998.

The final target structure would be a single integrated company, EADC. The perimeter of EADC should include as core businesses: civil and military transport aircraft, combat and military mission aircraft, helicopters, space launchers and orbital infrastructure, satellites and satellite operations, guided weapons and defense and aerospace systems. EADC’s business objectives would be determined by economic and financial performance criteria; shareholder value would be the major objective, and each business sector should achieve threshold profitability. EADC would be managed as a single entity, wholly owning and controlling all its assets and resources.

The members of Airbus, Saab and Finmeccanica, DASA and 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 Defense 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. EADS was an ambitious project, in the first place because of its size. As a Franco-German entity, the new group would already have been the third aerospace and Defense Company in the world, with 89,000 employees, a turnover of nearly 20 billion and profits of 1 billion in 1998.

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Page last modified: 16-07-2014 18:51:39 ZULU