EADS, poor thing, has a problem: what to do with a €10 billion ($13.5 billion) cash pile? As finance chief Hans Peter Ring notes, it's nothing to be ashamed of, and the fact that the company's cash hoard actually grew last year represents good, prudent stewardship during the financial crisis, when management was naturally concerned about what was coming next. But the money does need to be spent.
Small acquisitions are always on the radar and EADS wants to invest to develop the non-Airbus parts of its business, to grow out of a situation that has its airliner arm accounting for most of group revenue.
How about a mega acquisition or two? Chief executive Louis Gallois says he wants to build EADS business in the USA and Asia. So c'mon, Louis - just write the cheque and make that big US acquisition everybody's waiting for.
Or not. Most big acquisitions or mergers turn out to be flops. And, as demonstrated by the apoplectic reaction to its original win of the US Air Force KC-X tanker competition, EADS's North America troubles are political, not financial or technical.
Gallois notes, with some deserved satisfaction, that having too much money and a hugely successful business are what the French call problems of rich people.
He doesn't need to add that rich people know better than to fritter it away.
Source: Flight International
