EADS eyes takeovers to double sales by 2020: report


European aerospace group EADS wants to use takeovers primarily in the services sectorto help group revenue swell over the next decade, its chief executive told a German magazine.

“We want to double sales from €43 billion ($63.33 billion) now to around €80 billion by 2020,” Louis Gallois told WirtschaftsWoche in an interview released ahead of publication today.
“Of course this does not work through organic growth alone.”

While Airbus parent EADS is focusing now on conserving cash and boosting efficiency to master the economic crisis, it will have to seek acquisitions in the long run, he said.

EADS was casting an eye on the services, space and military sectors as a way to offset the volatile civilian aircraft business in which it competes with arch-rival Boeing Co.
“I see the potential, for instance, to have services generate 20-25 percent of group sales. Now we are a bit above 10 percent. These are services such as maintenance, training or repairs. We want to add new services as well.”

Gallois said EADS had not yet decided whether to take part in a potential $50 billion competition to build a US Air Force refuelling fleet, stressing that this depends on the rules that are set.
“We never said we would quit the contest, only that we had concerns about the current bidding process,” he said.
“Our partner Northrop Grumman and we agree that we cannot take part in the process in its current form because it seems as though it is not the best value for money that counts but rather who can build the cheapest aircraft with minimal capacity.”

He said that counted against its entry, which he said can carry more fuel, cargo and passengers that it’s rival.

Gallois also supported the idea of creating a “golden share” in EADS once a shareholder pact among German carmaker Daimler AG French publisher Lagardere and the French state runs out next year.
“No one in Europe wants to see a hostile takeover of EADS. A golden share could be a solution because it does not hem in any of the current owners and gives them more leeway,” he said.

A golden share controlled by Germany and France would give the countries power of veto over strategic decisions via one share that outvotes all the rest.