The European Aeronautic Defence and Space Agency (EADS) today announced it had acquired BAE Systems' 25 percent stake in European satellite and telecoms company, Astrium in what is effectively a free transfer.
Prior to completion of the transaction, EADS and BAE Systems will each make a capital contribution into Astrium of 84m to facilitate the acceleration of EADs' strategy of increasing the overall industrial and financial efficiency of the company.
EADS, which already owns 75 percent of Astrium, will pay 84m for BAE Systems stake in the company which will be effectively transferred to EADS for no net cash consideration.
"These terms reflect the current deterioration in the commercial space sector and also EADS' continued intent to position Astrium for a return of profitability in 2004 and any future consolidation of the space industry under unified management," the companies said in a joint statement.
Under the agreement, the shared control of Paradigm Secure Communications Ltd, which was formed to secure the Ministry of Defence (MoD) contract for the Skynet 5 military communications satellite programme, will now also be transferred to EADS. The Astrium deal is dependent on EADS securing the Skynet 5 contract from the MoD. If EADS does not achieve financial closure of the Skynet deal, BAE Systems will pay EADS 55m.
Francois Auque, member of the EADS executive committee, said: "Consolidating our ownership of Astrium will allow EADS to strengthen its strategic positioning in a rapidly changing marketplace. Taking full ownership of Paradigm will allow us to expand in military telecommunications satellites services, which we have identified as a major area of future growth."