Daimler begins sale of its 7.5 percent stake in EADS

Tue Apr 16, 2013 2:52pm EDT
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By Christiaan Hetzner

FRANKFURT (Reuters) - German carmaker Daimler (DAIGn.DE: Quote) began selling its remaining stake in Airbus owner EADS EAD.PA on Tuesday as part of a wider overhaul of the European aerospace group's core ownership nearly 13 years after its creation.

Daimler said on Tuesday that it received a waiver from a six-month lock-up period and would immediately begin placing with investors 61.1 million shares, equivalent to a 7.5 percent stake in Toulouse-based EADS.

"It comes as a bit of a surprise, since expectations were centered around a sale in either the third or fourth quarter, but given the recent volatility in global equity markets, it's tactically a smart move," JP Morgan analyst Jose Asumendi said.

German analyst and investor sentiment fell sharply in April, a key confidence indicator showed on Tuesday, hit by fears that the Cyprus debt standoff and weakening growth in China could take a heavy toll on Germany, Europe's biggest economy.

Chief Financial Officer Bodo Uebber said in a statement that Daimler's exit from EADS would allow the company to focus solely on its core automotive business: "We will invest the proceeds of the sale in the global growth of our divisions and the extension of our technological leadership."

Daimler's move follows on the heels of fellow founding shareholder Lagardere's (LAGA.PA: Quote) exit from EADS last week with the sale of a matching stake, paving the way for the aerospace group to have a larger free-market float.

The pricing of the offer of Daimler's shares in EADS is expected to take place on Wednesday. Based on the closing price of 37.19 euros, the stake is worth between 2.2 to 2.3 billion euros ($2.89-$3.02 billion).

A source close to the deal said the shares were being priced at between 36.20 and 37 euros each, about 2 percent lower on average than the 37.35 euros at which Lagardere sold its holding.   Continued...

Shareholders arrive for the Daimler annual shareholder meeting in Berlin April 10, 2013. REUTERS/Fabrizio Bensch