Aerospatiale Matra / EADS : A New Step

On October 14 and December 2, 1999, Aerospatiale Matra, DaimlerChrysler Aerospace AG and CASA signed agreements for the creation of the European Aeronautic, Defense and Space company – EADS. Following these historic agreements, the three companies have actively launched the EADS creation process in preparation for the initial public offering, planned this coming summer.

The required requests for authorization and approval have been filed. In particular, the European Commission and the French Commission des Participations et Transferts (CPT) are currently investigating this project. The French Conseil des Marchés Financiers (CMF) recently confirmed that these transactions will not adversely affect the rights and interests of Aerospatiale Matra shareholders.

Holders of Aerospatiale Matra shares will receive EADS shares in exchange for these shares.

Pending approval by the general meetings of shareholders, the current shareholders in Aerospatiale Matra will therefore become shareholders in EADS, a company registered in the Netherlands, operating under bylaws similar to those of a French corporation. Shareholders will be able to keep these new shares in their share savings plan, and will also retain their rights to bonus shares.

EADS will be one of the world’s leading aerospace and defense companies, with leadership positions in its core businesses of commercial transports, helicopters and commercial launch vehicles.

EADS’ market capitalization will place it in the top tier of European companies. The public float will increase considerably, to approximately 34 percent of the share capital, versus 19.3 percent today for Aerospatiale Matra shareholders. This will ensure excellent liquidity for the share.

Following the planned capital increase, the EADS shareholding structure will be as follows: Sogepa (the management company for French state holdings), Lagardère and a group of leading French private financial institutions will hold approximately 30 percent of the capital  ; DaimlerChrysler will also hold 30 percent ; and SEPI (the management company for Spanish state holdings) will have a 5.8 percent stake. All of these parties will act in concert. The remaining 34 percent of the capital will be publicly traded.

With the creation of a world-class technology group, Aerospatiale Matra takes an important step towards realizing the development strategy announced during its initial public offering. By becoming shareholders in EADS, Aerospatiale Matra shareholders will benefit from the higher profitability expected due to the size of the new group, its strong growth outlook and significant synergies.

During the special meetings of shareholders called to approve these operations, Aerospatiale Matra shareholders will be given an information packet with a detailed description of these transactions, along with the new bylaws and regulations governing the operation of EADS.