Infobox Company
company_name = European Aeronautic Defence and Space Company EADS N.V.
company_type = Public (Euronext|EAD, BMAD|NL0000235190|EAD, FWB|EAD)
foundation = 2000
location = Ottobrunn , Germany
Paris, France
Schiphol-Rijk, The Netherlands
key_people = Louis Gallois (CEO)
Rüdiger Grube (Chairman)
| industry = Aerospace, defence, and telecommunications
revenue = 39.12 billion (2007)cite web |url=http://www.eads.eu/xml/content/OF00000000400004/5/74/41987745.pdf |title=Annual Report 2007 |accessdate=2008-07-11 |publisher=EADS|format=PDF]
operating_income = profit €52 million (2007)
net_income = loss (€446 million) (2007)
num_employees = 116,500 (2007)
parent = SOGEADE
Daimler AG
divisions = Airbus
Defence & Security
Military Transport Aircraft
homepage = [http://www.eads.eu/ www.eads.eu]
intl = yes

The European Aeronautic Defence and Space Company EADS N.V. (EADS) is a large European aerospace corporation, formed by the merger on July 10, 2000 of DaimlerChrysler Aerospace AG (DASA) of Germany, Aérospatiale-Matra of France, and Construcciones Aeronáuticas SA (CASA) of Spain. The company develops and markets civil and military aircraft, as well as missiles, space rockets, satellites, and related systems. The company is headquartered in the Netherlands in Schiphol-Rijk. The company operates under Dutch law.


The 1997 merger of American corporations Boeing and McDonnell Douglas, which followed the forming of Lockheed Martin, the world's largest defense contractor in 1995, 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.". [cite news |first=Andrea|last=Rothman|coauthors=Landberg, Reed |title=Europe Defense Firms Feel Pressure to Unite|url=http://archives.seattletimes.nwsource.com/cgi-bin/texis.cgi/web/vortex/display?slug=2544541&date=19970615&query=Pressure+to+Unite |work=The Seattle Times|date=1997-06-15|accessdate=2007-09-12] European governments wished to see the merger of their defence manufacturers into a single entity, a European Aerospace and Defense Company. [cite news|title=Business: The Company File: Defense merger on the radar |url=http://news.bbc.co.uk/1/hi/business/the_company_file/130305.stm |work=BBC News |publisher=BBC |date=1998-07-10 |accessdate=2007-09-15 ]

As early as 1995 the German aerospace and defence company DaimlerChrysler Aerospace (DASA) and its British counterpart British Aerospace were said to be keen to create a transnational aerospace and defense company. [cite news |first=Adam |last=Jones|title=Europe cries foul as New BAe emerges |work=The Times |publisher=Times Newspapers |date=1999-01-20 |accessdate=2007-09-12] The two companies envisaged including Aérospatiale, the other major European aerospace company, but only after its privatisation. [cite news |first=Pierre|last=Sparaco|coauthors=Morrocco, John D. |title=French Government Grapples With Aerospace Strategy |work=Aviation Week and Space Technology |publisher= The McGraw-Hill Companies |date=1997-06-30|accessdate=2007-09-12] 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.cite news |first=Bernard|last=Gray|coauthors=Skapinker, Michael|title=Giant waiting in the wings: Bernard Gray and Michael Skapinker ask if Europe's defence industry can consolidate in time to challenge US dominance|work=Financial Times|date=1997-06-24|accessdate=2007-09-12] 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. [cite news|title=BAe and Dasa discuss proposals for merger: Aerospace groups still have 'important issues to resolve'|work=Financial Times |publisher= |page=1 |date=1998-07-24 |accessdate=2007-09-12] A merger was agreed between British Aerospace Chairman Richard Evans and DASA CEO Jürgen Schrempp in December 1998.cite news |first=Peter |last=Spiegel|title=The largest aerospace companies gather next week for the Farnborough air show but the event will be without its long-time unofficial host|work=Financial Times|page=11|date=2004-07-17|accessdate=2007-01-24] However when the British General Electric Company put its defense electronics business Marconi Electronic Systems 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. [BAE Systems Annual Report 1999 22. BAE Systems plc (2000). Retrieved on 2006-10-27.] cite news |first=Andrew|last=Turpin| title = BAE Eyes US Targets After Profit Rockets |work= The Scotsman| publisher =The Scotsman Publications|page=26| date =2000-03-04| accessdate = 2007-09-07] Evans stated that in 2004 that his fear was that an American defense contractor would acquire MES and challenge both British Aerospace and DASA.


DASA and the Spanish aircraft company Construcciones Aeronáuticas SA agreed to merge with the signature of a memorandum of understanding on 11 June 1999. [cite news |first=David |last=White|coauthors=Nicoll, Alexander|title=DaimlerChrysler wins fight for Spain's Casa: Deal boosts aerospace industry consolidation in Europe|work=Financial Times|date=1999-06-12|accessdate=2007-10-23] On 14 October 1999 DASA agreed to merge with Aérospatiale-Matra to create the European Aeronautic Defence and Space Company. [cite news |first=Alexander |last=Nicoll|coauthors=Skapiner, Michael |title=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 |work=Financial Times|date=1999-10-15 |accessdate=2007-10-23] 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. [ [http://www.eads.eu/1024/en/eads/history/chronos/2000.html History of EADS] ]

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. [cite press release |title=EADS and BAE SYSTEMS complete Airbus integration - Airbus SAS formally established |publisher=BAE Systems plc|date=2001-07-12 |url= http://www.baesystems.com/Newsroom/NewsReleases/2001/press_120720011.html |accessdate=2007-10-04] cite news|first=Pierre|last=Sparaco|title=Climate Conducive For Airbus Consolidation |work=Aviation Week & Space Technology |date=2001-03-19 |accessdate=2007-10-04] 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. [cite news|title=EADS, BAE and Finmeccanica Complete MBDA Merger|work=Defense Daily International |publisher= |date=2001-12-21 |accessdate=2007-10-04|quote=the new MBDA, the world's second largest missile manufacturer behind Raytheon]

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". [cite news| first = Mark| last = Odell| title = BAE agrees new deal for Astrium |work = Financial Times| page =15 | date = 2003-02-01 | accessdate = 2007-01-23] 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. [cite news |first=Peter|last=Spiegel|title=BAE denies Airbus sale plans|work=Financial Times|date=2005-09-07|accessdate=2007-09-07] However on 6 April 2006 BBC News reported that it was indeed to sell its stake, then "conservatively valued" at £2.4 billion.cite news|url=http://news.bbc.co.uk/1/hi/business/4886154.stm | title =BAE confirms possible Airbus sale | publisher =BBC News | date =2006-04-07 | accessdate =2006-08-12] 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. [cite news | first =David | last =Gow | url =http://business.guardian.co.uk/story/0,,1811589,00.html | title =BAE under pressure to hold Airbus stake | work =The Guardian | publisher =Guardian Newspapers |date =2006-07-03 | accessdate =2006-07-03] 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. [cite news | title = BAE Systems says completed sale of Airbus stake to EADS | publisher = Forbes.com | date =2006-10-13 | url = http://www.forbes.com/markets/feeds/afx/2006/10/13/afx3089453.html | accessdate =2006-10-13]

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. [ [http://www.communities.gov.uk/index.asp?id=1002882&PressNoticeID=2363 Dept for Communities & Local Govt: Award of state of the art IT contract to improve fire service delivery 07 Mar 07, (accessed 09 Mar 07)] ]

Recent activities

On 29 February 2008, the U.S. 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 Defense, is initially valued at $35 billion but has the potential to grow to $100 billion. It is also a sign of the growing influence of foreign suppliers within the Pentagon and breaks a relationship that has lasted decades with Boeing, which had built the bulk of the existing tanker fleet and had fought hard to land the new contract.

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. [cite web | url = http://www.reuters.com/article/ousiv/idUSN2861183920080301 | title = Northrop-EADS beats Boeing to build U.S. tanker| accessdate=2008-03-01]

However, the award was protested by Boeing, the other bidder on the project, which was upheld by the GAO. The Air Force announced a partial reopening of the bid, focusing on the eight (of nearly 110) areas where Boeing's protests were upheld, with a final decision due by the end of 2008.


* Airbus
** EADS Sogerma
* Military Transport Aircraft
* Eurocopter
* EADS Astrium
** EADS Astrium Satellites
** EADS Astrium Space Transportation
** EADS Astrium Space Services.
* EADS Defence & Security
** Defence Electronics
** EADS Military Air Systems, including products such as the Mako/HEAT, and stakes in the following companies:
*** Dassault Aviation (45.76%)ndash manufacturer fighters like the Dassault Rafale or the Dassault Mirage 2000.
*** Eurofighter GmbH (46%)ndash manufacturer of Eurofighter Typhoon.
*** EADS 3 Sigmandash a Hellenic company focused in the design, development, production and services provision of airborne and surface target drone systems.
** Defence and Communication Systems
** MBDA (37.5%)ndash missile manufacturer

Other units

* EADS North Americandash the U.S. holding company for the North American activities of EADS.
** American Eurocopter
** PlantCML [http://www.plantcml.com]
* ATR (50%)ndash regional aircraft manufacturer
* EADS Socata
* Arianespace (30%)

Corporate governance

EADS' Executive Committee is headed by Louis Gallois, the EADS CEO. Other members are François Auque (Astrium), Lutz Bertling (Eurocopter), Jean Botti (Chief Technical Officer), Fabrice Brégier (EADS Operational Performance), Ralph Crosby (EADS North America), Thomas Enders (Airbus), Jussi Itävuori (Human Resources), Marwan Lahoud (Chief Marketing and Strategy Officer), Hans Peter Ring (Chief Financial Officer EADS and Airbus), Carlos Suárez (Military Transport Aircraft) and Stefan Zoller (Defence and Security). [ [http://www.eads.eu/1024/en/corporate_governance/Executive_Committee.html EADS N.V. - Executive Committee ] ]

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. [http://www.eads.eu/1024/en/corporate_governance/Board_of_Directors/Board%20of%20Directors.html EADS N.V. - Board of Directors - Role and Composition ] ] The board also appoints the company's chairmen, one from the Daimler nominated directors and from the SOGEADE nominated directors. 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 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 June 25, 2005. At the same meeting the Board, in consultation with partner BAE Systems, named Gustav Humbert as President and CEO of Airbus.

Financial information

As of 3 July 2007 41.63% of EADS stock is publicly traded on six European stock exchanges, while the remaining 58.37% is owned by a "Contractural Partnership". The latter is owned by SOGEADE (27.38%), Daimler AG (22.41%), SEPI (5.46%) and Dubai Holding (3.12%). [John, Isaac. [http://khaleejtimes.ae/DisplayArticleNew.asp?xfile=data/business/2007/July/business_July224.xml&section=business&col=/ "Dubai Int'l Capital buys 3.12pc stake in EADS"] , Khaleej Times Online, 2007-07-06.] SOGEADE 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. [http://www.eads.eu/1024/en/investor/Stock_information/Shareholding_structure.html EADS Shareholding Structure] ]

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 UK Defence Procurement Minister Lord Drayson has 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." [cite news | last = Roberston | first = David | title = MoD tells European leaders to stop meddling in EADS | publisher = The Times |date=2006-10-05 | url = http://business.timesonline.co.uk/article/0,,13130-2389278,00.html | accessdate =2006-10-15]

On April 4, 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." [http://www.spacemart.com/reports/DaimlerChrysler_And_Lagardere_Cut_Stake_In_EADS.html DaimlerChrysler And Lagardere Cut Stake In EADS] ] 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." [http://www.iht.com/articles/2006/04/11/business/airbus.php Airbus plays catch-up with A350 jet] ." Phillips, D. "International Herald Tribune". April 11, 2006.]

On August 30, 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." [http://news.yahoo.com/s/ap/20060830/ap_on_bi_ge/france_russia_eads_2 EADS shares up on Vneshtorgbank reports] ." Yahoo News. August 30, 2006.] 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 October 3, 2006, shortly after EADS admitted further delays in the Airbus 380 program 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 per cent loss limit. Trading resumed later in the day with the one day loss holding at 7 per cent [http://business.timesonline.co.uk/article/0,,9067-2388196,00.html] .


Cluster bombs

As a result of criticisms, the Norwegian Government Pension Fund excluded EADS and its sister company EADS Finance BV from its portfolio in 2005, arguing that EADS manufactures "key components for cluster bombs." EADS and its subsidiaries fulfill all the conditions of the Ottawa Treaty. 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"), also all activities undertaken by EADS are in accordance with the national and international rules and regulations that apply to the company. EADS owned the company TDA in a joint venture with the company Thales S.A. and TDA produced the mortar ammunition PR Cargo, which can be considered cluster ammunition, however this has since been divested. 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. [http://www.regjeringen.no/en/dep/fin/Selected-topics/andre/Ethical-Guidelines-for-the-Government-Pension-Fund---Global-/Recommendations-and-Letters-from-the-Advisory-Council-on-Ethics/Recommendation-of-18-April-2006.html?id=419592#note3 The exclusion of EADS from the investment universe of the Government Pension Fund – Global has been reviewed] ]


In 2003 Tony Yengeni, former chief whip of South Africa's ANC, was convicted of fraud relating to an arms deal with South Africa, in which EADS were major players [ [http://www.sundaytimes.co.za/article.aspx?ID=298749 Jailed Yengeni shows no remorse] ] , worth around $5bn. The 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. [ [http://news.bbc.co.uk/2/hi/africa/1579194.stm Top ANC official resigns] ]

Insider trading investigation

On June 2, 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.cite news|title=Inside story; Share scandals in France|work=The Economist |publisher=The Economist Newspapers |date=2007-10-13|accessdate=2007-10-25]

The French government's actions are also under investigation; The stated-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 has been commenced on behalf of an institutional investor in the United States District Court for the Southern District of New York on behalf of U.S. citizens who purchased the publicly traded stock of EADS.

See also

*European defence procurement


External links

* [http://www.eads.com Corporate website]
* [http://www.eadsnorthamerica.com EADS North America]
* [http://biz.yahoo.com/ic/101/101208.html Yahoo! — European Aeronautic Defence and Space Company EADS N.V. Company Profile]
* [http://www.worldsecuritynetwork.com/showArticle3.cfm?article_id=13407 Russian capital acquires large stake in EADS]
* [http://www.nytimes.com/2008/03/01/business/01tanker.html?_r=1&th&emc=th&oref=slogin U.S.-Europe Team Beats Out Boeing on Big Contract 1 March 2008, NY Times]

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