EADS board discusses reorganization, rebranding plans

Tue Jul 30, 2013 2:05pm EDT
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By Tim Hepher and Cyril Altmeyer

PARIS (Reuters) - The board of EADS EAD.PA gathered on Tuesday to vote on a reorganization that will see the European aerospace group adopt the name of its main Airbus subsidiary, industry sources said.

By retrenching to three units instead of four, the restyled "Airbus Group" aims to sharpen efforts to double its margins by mid-decade to catch up with rival Boeing (BA.N: Quote) and get a lift from one of Europe's best known brands.

Barring a request by the company's board to ask for more time to review the changes, the reorganization will be announced on Wednesday with first-half earnings that are expected to show flat operating income at the main Airbus plane making division.

Chief Executive Tom Enders launched a strategy review after failing to secure a merger with UK defense company BAE Systems (BAES.L: Quote) and instead winning a shake-up in governance last year.

The main change will involve merging the defense and space divisions into one Munich-based unit, called Airbus Defence & Space. This will also incorporate Airbus Military, the Spanish operation which builds refueling tankers and army transporters.

A potential web site, airbus-defence.com, was registered a few days ago, according to online domain records.

Eurocopter, the world's largest civil rotary aircraft maker, will stay as a separate unit and will become Airbus Helicopters.

The core Airbus plane making business, which makes up close to 70 percent of group revenues, should keep its one-word name despite earlier suggestions that it might gain a longer title to drive home the fact that it is the unit of a larger group.   Continued...

Logo of EADS is seen at the European aerospace and defence group EADS headquarters in Les Mureaux near Paris January 12, 2011. REUTERS/Charles Platiau