Alan George/BRUSSELS

European Commission (EC) competition regulators will this week grant the go-ahead for the formation of EADS (European Aeronautic Defense and Space), according to sources in Brussels.

Approval of the merger of France's Aerospatiale Matra, Germany's DaimlerChrysler Aerospace and Spain's Casa will be subject to compliance with only minimal demands - with EADS required to assist in establishing a new supplier of composite materials used in satellite manufacture.

Precise arrangements had yet to be agreed as Flight International went to press, but it is understood that the EADS partners have undertaken to make available technical know-how and equipment to assure the new entity's viability. No wholesale divestment of any manufacturing facility will be involved, and assistance to the new supplier will have no major impact on EADS' business.

Though EADS was last month chosen to partner Italy's Alenia Aeronautica, that deal is not part of the current review and will require separate regulatory approval by Brussels. Contractual details of the agreement - for a joint venture, rather than a merger - are being negotiated and should be revealed to the EC later this year.

Following EC approval of the EADS merger, the new company can be legally created and a planned flotation can go ahead. The restructuring of Airbus, in which EADS has an 80% stake, is now all-but agreed with minority owner BAE Systems, and a flotation is expected in mid-July.

The partners will retain separate identities at the ILA air show in Berlin next month, with EADS' first public presentation due at Farnborough in late July.

Source: Flight International