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EADS to decide on Airbus name change in restructuring drive

European aerospace giant EADS is set to decide Tuesday whether to change its name to Airbus, its better-known plane unit, as part of an overhaul that will also merge its defence and space units.

The board meets Tuesday to discuss what will be a key restructuring drive aimed at raising margins and giving more visibility to the group, which makes helicopters, missiles, satellites and drones as well as commercial planes.

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The decision is due to be announced Wednesday at 0500 GMT along with first-half results.

Tom Enders, head of EADS, has been working on the wide-ranging reforms since a hugely publicised merger attempt between the European group and Britain's BAE Systems failed in October.

According to several sources within the company, he will suggest that the current Cassidian defence division merge with space unit Astrium and Airbus Military, which makes military transport equipment.

The entire company would also be re-named Airbus, in a bid to take advantage of the global fame of the plane-maker which contributes more than 60 percent of its annual turnover.

To placate Germany -- a substantial shareholder -- the new space-defence unit, which would be named Airbus defence, would be based in Ottobrunn near Munich and would be headed up by an as-yet unnamed German executive.

The Eurocopter unit, the global market leader in civilian helicopters, would meanwhile take the name Airbus helicopters.

"It's just recognising the reality of EADS, which is that Airbus is the dominant entity," said Nick Cunningham, an aviation analyst at the London-based Agency Partners.

"Eurocopter is extremely well known but Astrium and Cassidian probably don't get the same recognition," he added.

"It (name change) would help with the defence electronics business, which is pretty small. It would help to market it as part of an Airbus business."

Christophe Menard, a Paris-based analyst at Kepler Cheuvreux, said the merger between Cassidian and Astrium could make a group target of reaching a 10 percent operating margin in 2015 "more credible."

With its new structure, the Airbus group will look more like its arch-rival Boeing, whose main units are Boeing Commercial Airplanes and Boeing Defense, Space and Security.

EADS was created in 2000 of a merger of leading German, French and Spanish aerospace companies.

The name change has been on the cards for a long time, since it was believed that EADS, standing for the European Aeronautic Defence and Space Company, suffered from weak brand recognition.

But the failed merger attempt with BAE Systems boosted recognition of the EADS name, causing some executives to question any potential name change.

"When EADS wasn't known, it (a name change) was of real interest, it would definitely have been added-value for the group," one top executive, who refused to be named, said recently.

"But today, studies show that EADS is known, people know what EADS is particularly since the aborted merger with BAE Systems last year."

by Patrick RAHIR © 2013 AFP

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Source : AFP

Published on ASDNews: Jul 30, 2013


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