EADS Closes Deal for 10% of Irkut Corp.
Dec 22, 2005 01:38 EST
In the aftermath of Russia’s MAKS 2005 exhibition in August, DID reported that EADS had committed EUR 50 million (USD $62 million) to buy 10% of Irkut Corp. On December 16, 2005, Irkut Corporation and EADS closed the deal by signing a sale contract which makes out as many as 97.8 million shares in return for $65.3 million.
The two firms also signed an Agreement of Cooperation defining new principles of the two companies’ interaction, assigning additional workshare to Irkut for Airbus civil aircraft. OOO EADS CEO Vadim Vlasov will sit on Irkut’s Board of Directors, and EADS’ share purchase takes on added significance in the context of Moscow Defense Brief’s recent article on consolidation within the Russian aircraft industry.
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On the aviation front, Irkut is being integrated into Airbus A350 production in a potential $3 billion/ 30-year deal, and Irkutsk Aviation Plant is manufacturing A320 family components. Currently, both companies are in process of negotiations to extend the amount of products to be manufactured in Irkutsk.
The parties will also move forward with their 2005 agreement to jointly certify and market the Beriev Be-200 multi-role seaplane and firefighting aircraft.
UPDATE:
June 17/08: EADS will sell its 10% stake in Irkut to UAC, as part of a buyout effort. In March 2008, UAC reportedly offered EADS RUB 2.16 billion, or RUB 22.28 (approximately $0.95) per share, as part of its attempt to net 49.9% of the company’s charter capital. With this purchase, UAC effectively consolidates the 38.22% of Irkut transferred from private share holders and the 11.89% it absorbed from Sukhoi, into a 50.1% majority share.
EADS has indicated that it is still interested in maintaining a share in Russia’s state-owned United Aircraft Corporation (UAC) holding company, and is “willing to acquire the equivalent amount in UAC as soon as the financial valuation of this company will have been achieved as planned, and the operation will be made technically possible.” Forecast International.
Dec 21/05: Airbus is placing additional large work packages for aircraft of the A320, A330/A340 and A380 Families with two Russian companies – IRKUT Scientific Production Corporation, and Voronezh Aircraft Production Association (VASO). The work packages will be worth $200 million over ten years to Russia, which means doubling the already contracted volume.
