BAE to sell 20% in Airbus to EADS

LONDON: BAE Systems will agree to sell its 20% stake in Airbus to the Franco-German aerospace firm EADS for £1.9bn. Unnamed sources from London’s financial district told The Observer newspaper that the British defence group’s chief executive Mike Turner will convene a board meeting “in the next few days” to decide the issue.

But BAE Systems described the report as premature and speculative and stressed that shareholders would have the final say on any deal. If the sale gets the go-ahead, the price would be significantly less than the valuation of the stake made by BAE Systems’ own accountants.

In July, an independent assessment by investment bank Rothschild put the value of the holding at e2.75bn, far less than the company’s own estimate. Turner appointed accountants PricewaterhouseCoopers to investigate the reasons for the low valuation.

The Observer said that BAE is thought to have decided on a “quick sale” of its stake in EADS, which has an 80% share in Airbus, because of concerns over the development and soaring cost of the delayed A380 superjumbo.