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EADS eyeing acquisitions in India and the US news
30 May 2008

Berlin: EADS CEO, Louis Gallois, has said that his company is scouting for acquisitions, particularly in the US and India. According to Gallois, acquisitions were needed to offset the unfavourable  dollar/euro exchange rate that were affecting the company's profit margins.

Queried if EADS would ever manufacture aircraft in India Gallois said: ''Why not ? There is a shortage of skilled engineers in Europe and a surplus in India. It is not only a low-cost market, but a large one too.''

EADS is one of the contenders for an Indian Air Force contract for 126 medium multi-role combat aircraft (MMRCA). Local production, by way of an offset arrangements will be part of the agreement.

Regarding the MMRCA contract, Gallois said that EADS would win equally if either the Eurofighter or the Dassault Rafale was chosen for his company had a 46 per cent stake in both.

As for acquisitions in North America, Gallois said this could reduce the company's exposure to an unfavourable exchange rate. ''We want to extend our US footprint and also sell some of the Airbus sites,'' he says. EADS had announced in December that it would sell off manufacturing plants at Filton in the UK, Meaulte and Saint Nazaire Ville in France and Nordenham, Varel and Augsburg in Germany.

''Ninety per-cent of our employees are in Europe and 65% of our revenue comes from Airbus,''Gallois said. ''We need to diversify and move more into defence, security and services. This won't limit our Airbus business, but these other businesses would be less cyclical and more profitable.''

With regard to Airbus' operations Gallois said that by the end of April this year the company had received 432 orders. ''Sales are difficult with the current financial crisis,'' he said.

He also warned that sales figures to be announced at Farnborough were likely to be less than last year.

Gallois also renewed his call for more government funding to help the European aerospace industry. ''We cannot compete with Boeing when it receives so much state subsidy,'' Gallois said.

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EADS eyeing acquisitions in India and the US