“Market Cap $56.94 B As of May 2014
At a Glance
- Industry: Aerospace & Defense
- Founded: 2000
- Country: France
- CEO: Thomas Enders
- Website: www.eads.net
- Employees: 144,061
- Sales: $78.67 B
#131 Global 2000
- #90 in Sales
- #338 in Profit
- #203 in Assets
- #169 in Market value
Airbus Group NV manufactures and sells commercial and military aircraft, civil and military helicopters, commercial space launch vehicles, missiles, satellites, and defence systems and electronics. It operates through the following segments: Airbus, Eurocopter, Astrium, and Cassidian. The Airbus segment develops, manufactures, markets, and sells commercial jet aircraft and military transport and special mission aircraft. The Eurocopter segment engages in civil and military helicopter marketing and also provides related services. The Astrium segment designs, develops, and manufactures satellite systems, orbital infrastructure and launchers, and also provides telecommunication and geo-information services. The Cassidian segment provides global security systems and solutions to civil and military customers. The company was founded on December 29, 1998 and is headquartered in Leiden, Netherlands.“
“Airbus Group History
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 theConcorde, 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 itsput 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.
In March 2007 EADS Defence and Security Systems division was awarded an eight year, £200m contract to provide the IT infrastructure for the FiReControl project in the UK.
Recent activities (2008–2014)
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 United States Department of Defense, 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 nearMobile, 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. By October 2012, the merger between BAE Systems and EADS had been called off.
Airbus Group Bank is to be setup through the purchase of Salzburg München, to allow Airbus Group to borrow at rates subsidized by the European Central Bank for foreign arms sales.
Renaming and reorganization
Only a few weeks after the unsuccessful merger attempt, a corporate restructuring was announced, aiming at simplifying the governance and shareholder structure.Subsequently, French media group Lagardère and Daimler sold their shares in the group. 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, which had become its most important revenue generator. In January 2014, EADS was reorganised as Airbus Group, with three divisions.”
*Information from Forbes.com and Wikipedia.org
**Video published on YouTube by “Airbus Group“