BAE Discusses Selling Its Airbus Stake

British defense and aerospace company BAE Systems said it plans to sell its 20 percent stake in European aircraft manufacturer Airbus in order to concentrate on the U.S. defense market.

Apr 7, 2006

BAE Systems PLC, a defense and aerospace group based in Great Britain, said Friday that it is in discussions to sell its 20 percent stake in aircraft maker Airbus.

BAE is negotiating with Franco-German group European Aeronautic Defense & Space Co., which owns the remaining 80 percent of Airbus, about the sale, the Associated Press reported. BAE's stake is reportedly 3.5 billion euros ($4.3 billion).

"We believe that now is the right time for us to divest our Airbus shareholding to allow us to concentrate on our core trans-Atlantic defense and aerospace strategy," BAE Chief Executive Mike Turner said in a statement.

The sale is in line with BAE's focus on building its presence in the U.S. defense market through acquisitions. According to AP, EADS has had an option in place that would let it opt to take over the stake, and has made no secret of the fact that it is eager to take full ownership of Airbus.

European-based Airbus has passed U.S.-based Boeing as the largest aircraft manufacturer in the world.