Airbus defence electronics unit to pick up buyer next month
23 November 2015
European aerospace and defence giant Airbus Group is set to identify a buyer for its defence electronics unit by the end of the year, as part of the group's restructuring plan to place its ailing defence business on a strong footing.
In an interview with German newspaper Frankfurter Allgemeine Sonntagszeitung published yesterday, Airbus chief executive Tom Enders said, "The sales process for the defence electronics is ongoing, and we want clarity on the buyer by the end of the year.''
The move is part of the group's strategy of selling assets worth around €2 billion ($2.1 billion).
In March, Airbus, a partner in the Eurofighter consortium, said it planned to sell a 15-per cent stake Dassault reducing its holding to around 27 per cent from 42 per cent (See:Airbus Group to sell a further 15 per cent stake in Dassault).
Last year, the Airbus group said it had put its defence and security electronics and satellite communications services businesses up for sale to make its defence and aerospace subsidiary leaner and more sustainable.
Airbus Defence & Aerospace was formed in January 2014 during the corporate restructuring of European Aeronautic Defence and Space (EADS), and comprises the former Airbus Military, Astrium, and Cassidian divisions.
The business comprises military aircraft, communication satellites and systems and electronic systems. Last year, the group declared core activities of the division to be rocket launchers and satellites, fighter aircraft and missiles.
The defence electronics unit which makes components for radars, optronics, electronic warfare and border control applications, which are used in surveillance or for equipment used by pilots to fly at night or in fog conditions.
The unit has about €100 million in annual earnings before interest, taxes, depreciation and ammortisation on €1 billion in sales, according to Reuters.
The sale could fetch a price of up to €1 billion and final offers could come out early next month, Reuters reported citing two people familiar with the matter.
Airbus plans to attract also foreign buyers, contrary to the company's general policy framework.
"If I'm selling something I have to get the best possible price for it," Enders said.
It is understood that potential buyers include German defence group Rheinmetall teaming up with US private equity giant Blackstone, private equity majors Cinven, Carlyle and KKR, and also French defence electronics giant Thales group.