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EADS's disparate group of subsidiaries

As well as stakes in missile house MBDA and the Eurofighter consortium of 37.5% and 46%, respectively, EADS 10 years ago inherited a disparate group of small businesses from its three legacy companies. Some wholly owned and others joint ventures, they did not fit neatly into any of its trading divisions.

They included French turboprop manufacturers Socata and ATR - a 50/50 partnership with Italy's Alenia Aeronautica - as well as aerostructures, cabin interiors and cockpit seats specialist Sogerma. From the German side, it ended up with freighter conversion unit EFW and an independent missile house, LFK, that for political reasons was not absorbed into MBDA when it came into being around the same time as EADS.

ATR remains a distinct entity - its chief executive reports to EADS and Finmeccanica. Picture: ATR 
There has been a shake-out of some of the biggest anomalies. ATR remains a distinct entity, with its chief executive responsible to the boards of EADS and Alenia parent Finmeccanica. In 2005, LFK was rolled into MBDA as its new German division, but EADS's 37.5% stake in the business, alongside BAE Systems' 37.5% and Finmeccanica's 25%, did not alter.

EFW and its French counterpart Sogerma are managed as part of Airbus. Sogerma derives much of its business directly from Airbus and ATR, but is run semi-independently from Toulouse and treated as a third-party supplier, as are two new businesses - Aerolia of France and Premium Aerotec of Germany.

Originally part of Airbus's subassembly operations, these were packaged to be sold as part of a cash-raising divestment in 2007 along with a plant in Filton, UK.

However, while GKN moved to snap up Filton, political and union opposition and last minute nerves caused by the onset of the credit crunch put paid to plans to offload the French and German units to Latécoère and MT Aerospace respectively. Instead, EADS compromised by spinning them off into separately branded operations with a mission to capture third-party business and drive efficiencies ahead of an eventual sale.

One legacy business now under new ownership is Socata. The company became Daher-Socata when the German defence giant bought a 70% stake in the Tarbes-based aerostructures and TBM 850 manufacturer in 2008.

The creation of EADS in 2000 also saw the new entity becoming a silent shareholder in some major aerospace concerns. The most significant is a 46% stake in Dassault Aviation, a throwback to an attempt by France's socialist government in the 1980s to merge the private company into the state-owned Aerospatiale.

Aside from seats on its board, EADS has no say in the running of the manufacturer of the Rafale fighter and Falcon family of business jets, which is still controlled by French tycoon Serge Dassault, son of founder Marcel.

Another oddity was a stake in Embraer, which long led to speculation that a partnership with the Brazilian manufacturer - in regional jets, business jets or military aircraft - or even a full merger might be in the offing. EADS sold its final shares in Embraer in 2007, but speculation has continued.

Finally, just to complicate matters further, EADS indirectly acquired an interest in Thales in 2009 when Dassault Aviation bought Alcatel-Lucent's 20% share in the Anglo-French electronic systems manufacturer. A grand merger of EADS with Thales and/or Dassault has been on and off the agenda since 2000 - but competition concerns (over EADS controlling one of its biggest suppliers) and German fears over a French domination of EADS have always been stumbling blocks.

Dassault remains a fiercely independent French family firm unlikely to entertain the idea of being run even indirectly by German managers, but a Thales/EADS union down the line cannot be ruled out.

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