Dasa and CASA to merge
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June 13th, 1999
DaimlerChrysler Aerospace AG (Dasa) has won the hand of Construcciones Aeronauticas (CASA.). The Spanish state owned group and the German based company signed a Memorandum of Understanding to merge the two companies on Thursday. The combined company, for which no money will change hands, will have sales revenues of 11 billion Euro and a workforce of 53,000 people, making it the sixth largest defence industry in the world, behind Lockheed Martin, Boeing And Raytheon of the US, BAe/Marconi in the UK and Aerospatiale/Matra in France. Sepi, Spain's state holding company, which controls CASA, said it would take between 11.5 and 13.5 per cent of the joint venture but planned to privatise its holding.
"Jointly we are now in the position to take the largest cross-border step in the restructuring of the European aerospace industry and thus make an excellent contribution toward consolidating and optimising the success of major programs such as Airbus and Eurofighter," declared Dr. Manfred Bischoff, President and CEO of Dasa.
CASA had been wooed by all the major European defence companies, including Aerospatiale of France, British Aerospace (BAe) of the UK and Finnmeccanica of Italy. BAe had reportedly been put off by the asking price of over $2 billion which it considered was more than double what the company was worth. However John Weston, Chief Executive of BAe said that he was "...absolutely delighted about the merger." The arrangement achieved the objective of closer European defence cooperation, he added.
The new company will become the largest shareholder in both Airbus and Eurofighter, with share holdings of 42% and 43% respectively.
As Bischoff emphasised: "The aim of the merger is clear: We will strengthen our competitiveness by combining our complementary activities. And together we will continue to contribute to the restructuring of our industry in Europe." The new company will hope to see companies such as Finnmeccanica of Italy join in due course. Rumours of a re-awakening interest in reviving the BAe/Dasa merger, dashed when BAe went it alone with Marconi at the end of the year now seem wishful thinking.
The major European companies are now looking for transatlantic links. Martin Bischoff has sent a further buzz round the aerospace industry's leading player gathered in Paris by cancelling a traditional start of show and flying to the United States 'on business.' It has been suggested that Lockheed Martin may be involved in negotiations. This follows rumours in the US of increased interest by Lockheed Martin in taking an interest in cooperation in Airbus.
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