EADS Plans IPO; British Aerospace Remains Outside

The new aerospace group European Aeronautic Defense and Space (EADS) plans a $5 billion IPO this summer, selling about a third of its equity. The group, composed of France's Aerospatiale Matra, Germany's DaimlerChrysler Aerospace, and Spain's Casa, is a major new challenger to the dominant U.S. aerospace industry. It holds an 80% stake in the Airbus consortium, with the rest in the hands of British Aerospace (BAe), which is so far shunning EADS. The mainland European alliance is now inviting Italy's Alenia-Finmeccanica to join the team. BAe's self-exclusion could undermine the ability of EADS to present a unified front and discourage investors when the IPO is launched on the Frankfurt and Paris stock exchanges. And the EADS partners already are arguing among themselves about whether to spend money to build a new 600 seater Airbus or save money to guarantee an attractive stock price.

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