Tags: Daimler | EADS | Holding | Autos

Daimler to Sell $2.17 Billion EADS Holding to Focus on Autos

Wednesday, 05 Dec 2012 08:20 PM

 

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Daimler AG, which helped form European Aeronautic, Defence & Space Co. more than a decade ago, is selling half its remaining holding in the company, valued at 1.66 billion euros ($2.17 billion), to focus on cars and trucks.

An accelerated bookbuilding for 61.1 million EADS shares, or about 7.5 percent of the company, started Wednesday and is set to be completed Thurs, the Stuttgart, Germany-based company said in a statement. The owner of Mercedes-Benz will sell more of its remaining 7.5 percent stake after a lock-up period of 180 days from the end of the sale of the initial tranche.

“We intend to further reduce our equity interest in EADS,” Chief Financial Officer Bodo Uebber said Wednesday in a statement. “We want to concentrate on our core business of automotive manufacturing and mobility services.”

Daimler’s sale of EADS shares is part of an overhaul of the shareholder structure of the parent of planemaker Airbus SAS. Germany will join France in holding 12 percent of EADS as part of changes that will eliminate governments’ veto rights over business decisions. The agreement frees Daimler from the obligations of serving as Germany’s voice at EADS.

Daimler’s sale will raise about 1.66 billion euros based on EADS’s closing share price yesterday of 27.23 euros in Paris. The German company plans to invest the money in its auto businesses, including in research and development. Much of the 7.5 percent holding is already earmarked.

Stock Performance

EADS shares have risen 23 percent over the past 12 months, valuing the company at 22.5 billion euros. Daimler stock has gained 9.9 percent over the same period, for a market capitalization of 40.8 billion euros.

Germany’s KfW bank, which will hold the government’s stake, will buy a 2.76 percent holding from Daimler. Existing shareholders in the Dedalus consortium will buy 1.9 percent of EADS from Daimler, which is also the world’s largest maker of commercial vehicles.

Daimler, which helped create EADS by merging its Dasa aerospace unit into the company, will decide on the timing and process for further sales in “due course,” Uebber said yesterday.

Morgan Stanley and Goldman Sachs are joint bookrunners for Daimler’s EADS sale, while JP Morgan is the manufacturer’s financial adviser.

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