October 9, 2014
A win-win situation lies on the horizon for Airbus and Dassault Aviation
Clearly Airbus listens to its advisers. Last year Activist hedge fund TCI described the Airbus stake in Dassault “a poor use of capital” and suggested Airbus should sell it. Soon afterwards Airbus set about creating a strategy where they could relinquish a percentage of their holdings in the company in as profitable manner as possible. Currently Airbus owns a 46 percent stake in Dassault Aviation and they are currently weighing up the possibilities of placing a 10% stake in the business with financial institutions.
Dassault Aviation is currently controlled by the family holding company, Groupe Industriel Marcel Dassault, which owns 50.55 a percent stake in the company which is estimated to be worth €10 billion. However in response to the possibility of Airbus releasing the tightly-traded stock, the family controlled Dassault Aviation agreed to buy back 10% of the previously traded stock. With the release of 10% to financial institutions, that would see 20% of the stock already taken care of.
Airbus Group’s head of corporate communications Rainer Ohler said: “That provides an obvious route for a partial exit…. We believe, however, that longer-term value objectives might be better served through combining a sale to Dassault with the placing of a meaningful amount of shares in the market, enough for there to be much improved liquidity, and so we continue to review our options in this respect”
In July, Airbus decided to end a longstanding arrangement to warehouse their stake in Dassault on behalf of the French government and made it very clear it was more a case of ‘when’ rather than ‘if’. Airbus had inherited their stake in Dassault from Aerospatiale together with a substantial headquarters building in Paris. The sale of this building for €60 million this year certainly helped boost Airbus profits in a year after their stock value fell 10.6% in comparison to Dassault’s increase by 3.6%.
Rainer Ohler made it abundantly clear that Airbus had received “numerous expressions of interest from investors” while it has been made clear the Dassault family want to expand the market float, bring in new investors, and progress while still retaining control of the company.