Carol Reed/Rome Andy Nativi/Genoa
After a last-minute re-evaluation prompted by an improved offer from BAE Systems, Finmeccanica has chosen European Aeronautic, Defense and Space (EADS) as a joint venture partner for its Alenia Aeronautica subsidiary.
The agreement, sealed in Rome on 14 April, involves a 50:50 military and civil aircraft venture, to be established by the end of the year, and meet Finmeccanica's requirement for an equal status partnership.
The venture will combine Alenia's civil aircraft and fighter, trainer and military transport businesses with the military activites of EADS partners CASA and DaimlerChrysler Aerospace and Aerospatiale Matra's ATR work with Alenia.
The new entity will contest European military aircraft leadership with BAE, controlling 62.5% of Eurofighter (at the core of the EADS deal, but excluded from BAE's initial bid) and 70% of the Airbus Military Company A400M tactical transport.
EADS says it also plans "to further link Finmeccanica with the Airbus system", having invited it to join the planned Airbus Integrated Company as a 5% shareholder, an option that can be exercised within three years.
It will also "have a participation of up to 10%" in the A3XX programme, the new partners say.
Dubbed "JV Co", the entity will have combined revenues of c2.5 billion ($2.4 billion), employee some 17,000 people and, in organisational terms, will be a subsidiary of the aeronautics division of EADS. It will be managed via operating bodies established in Italy, Germany and Spain.
Political considerations were also key to the decision, with state holding company IRI, the Italian treasury and the Prime Minister's Office all favouring the "more European" EADS option.
Alenia was also wary of being engulfed by a BAE tie-up, while the UK company may have been unable to match EADS' offer on Airbus activities.
The EADS deal further diversifies Finmeccanica's web of aerospace alliances; it is already twinned with GKN Westland (helicopters), "New Matra BAe Dynamics" (missiles), Astrium (space) and BAE via Alenia Marconi Systems (military electronics). The state-owned group's armaments/armour, non-AMS electronics and underwater systems businesses still seek partners.
The EADS-Alenia deal appears to push BAE even further in the direction of a transatlantic partnership, with media speculation on a possible full merger with Boeing rife just days before the Finmeccanica announcement. Both companies played down the merger rumours.
BAE's Alenia bid centred on a trainer and transport aircraft venture, although the offer was later extended to include combat aircraft. It says it was "disappointed" by the rejection of its bid, which also included Finmeccanica's non-aerospace activities.
EADS co-chairman designate, Jean-Luc Lagardère, says the Alenia battle was "a singles match", and had to have a winner, but that the wider competition will be "a doubles tournament", in which EADS will require a partner, and BAE might therefore feature.
<li>Dassault Aviation, which offers fighter aircraft in competition with EADS (its part-owner via Aerospatiale's 45.7% holding), says it was neither "invited" to join nor "consulted" on the JV Co entity. Serge Dassault, a 49.9% shareholder is reportedly keen to swap sides and join BAE.
Chief executive Charles Edelsteene says Dassault remains in "strategic co-ordination" with EADS. "There is no change in our status," he says.
EADS co-chair Manfred Bishoff, says France would not allow a BAE link-up.
Source: Flight International