EADS core shareholders decide on changes in management and leadership structure

Category

Corporate & other activities, Finance

Paris, July 16, 2007

  • Rüdiger Grube to be sole Chairman of the Board of Directors
  • Louis Gallois to be sole CEO of EADS
  • Thomas Enders to be CEO of Airbus
  • Fabrice Brégier to be COO of Airbus
  • Number of independent members on the Board of Directors to be increased

After an extensive review of the Group’s governance system, the Core Shareholders of EADS – DaimlerChrysler, Lagardère and the French Government – together with the EADS management team have decided to modify the company’s current management and leadership structure. Guiding principles of the modification are efficiency, cohesiveness and simplification of EADS management and leadership structure, towards governance best practices and in the respect of balance between the French and the German shareholders. The German Government has been consulted as well.

Under the simplified management structure, EADS will be led by a single Chairman and a single CEO.

Rüdiger GRUBE will assume the position of sole Chairman of the Board of Directors of EADS. In this role, he will be responsible for overseeing the Group’s strategic development and dealings with its Core Shareholders. In particular, he will chair the newly created EADS’s strategic committee.

Louis GALLOIS will assume the position of sole CEO of EADS. In this role, he will be responsible for leading the management team in the execution of the Group’s strategy and managing the company’s interaction with public shareholders.

Thomas ENDERS will assume the position of CEO of Airbus in the Toulouse headquarters of the company, reporting to the CEO of EADS. He will be supported by Fabrice BREGIER as COO of Airbus.

At the end of the on going 5 year mandate of the concerned EADS managers, the nationalities will alternate on these positions and Arnaud LAGARDERE will succeed to Rüdiger Grube as the Chairman of the Board of Directors.

The Core Shareholders have also concluded that it is in the best interest of the Group to recommend an increase in the number of independent members on the Board of Directors to appropriately reflect the global profile of EADS by conforming to international corporate governance best practices.

As part of this proposal both DaimlerChrysler and French holding company, Sogeade, will each relinquish two seats on the Board of Directors. The Board will propose at the next shareholders meeting the election of four independent directors, who will join the Chairman, the CEO, two representatives from DaimlerChrysler, two representatives from Sogeade and one representative from SEPI on the future Board of Directors of EADS. Apart from the CEO, the Board will no longer comprise executive directors.

EADS and its Core Shareholders believe that this redesigned Board structure enables a continued close working relationship among existing Board members while providing the Group with the additional benefit of the experience and independent perspective that the new members will bring to their responsibilities. The EADS CEO and his Executive Committee will have more leeway in the day-to-day management of the company: in particular, investments below €350M become its sole responsibility, as well as for the appointment of the management teams of EADS main subsidiaries and business units, save for Airbus CEO and EADS Executive committee, whose appointment will be decided by EADS CEO, EADS Chairman and the board.

The board of directors’ decisions will be taken on a simple majority vote, save for a limited list of reserved matters (including appointment of Chairman, EADS CEO and Airbus CEO and major strategic or investment decisions), which will require approval by Sogeade and Dasa directors.

The management appointments at EADS will adhere to the principles of the “best man for the job” while at the same time maintaining the balance and diversity of the Group, consistent with its heritage and founding shareholders.

These modifications will reinforce the efficiency of the group and contribute to strengthen its position as a global leader of the aeronautics and defence industry. They will be fully implemented and become effective from an EADS shareholders’ general meeting to take place during the fourth quarter of 2007.

Since its formation in 2000, EADS has been a symbol of successful European industrial cooperation in one of the most competitive industries globally. For the past seven years, the dual-headed management structure with two Co-Chairmen and two co-CEOs has provided the necessary balance and stability required by a company with such a unique industrial heritage. It has allowed the Group to achieve outstanding results and overcome major technological challenges that are an inherent aspect of progress and innovation. However, the Core Shareholders and EADS’ leadership have concluded that a simplified management structure is now more appropriate to provide the unified leadership needed for the next phase of the Group’s development.

EADS’ industrial shareholders, DaimlerChrysler and Lagardère, and the French, German and Spanish Governments, remain fully committed to the Group and firmly believe that this simplified management structure will provide a framework for effective corporate governance and continued future success.

Sogeade and DC have concluded that, based upon the latest financial reports provided by EADS management, the current financial situation of the company is sound and robust and there is today no requirement for an equity injection into the company. This situation is evidenced in particular by the confidence of the customers, as testified by the recent commercial orders received by the company.

Consistent with their responsibilities as stable strategic shareholders, Sogeade and DC stay committed to maintaining a robust investment grade credit rating for the company. To this end, they will keep on monitoring EADS financial status; they will in particular take this objective into account when debating over the dividend proposal to the shareholders or when debating over any potential future need for an improvement of the capital structure or an equity injection

The Lagardère Group is a market leader in the media sector (books, distribution/retail, press and audiovisual).
The Group also has interests in the high technology sector via a 14.87% stake in EADS.
The reference market for Lagardère shares is Euronext Paris (Eurolist – compartment A).

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Arnaud Molinié - tel: 01 40 69 16 72 - email : amolinie@lagardere.fr

Investor Relations Contact:

Laurent Carozzi - tel: 01 40 69 18 02 - email : lcarozzi@lagardere.fr

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