Russian muscle

13 September 2006 By Pierre Briancon

Russia wants board representation and possibly a blocking minority in Eads, the owner of Airbus. The request should be turned down. A Russian director would make it hard for Eads to develop its defence business. And one shouldn t be needed to sell more Airbuses to Moscow.

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Russian president Vladimir Putin will ask for a Russian representative on the board of Eads at a meeting with Jacques Chirac later this month, according to Russian business daily Kommersant. Vneshtorgbank, fullyowned by the Russian government, has bought a 5% stake in the panEuropean aerospace and defence company, maker of Airbus. A close aide to Putin said this week that Russia could insist on a blocking stake down the road, if attempts at better cooperation between Eads and the Russian aircraft industry come to fruition.

The French and German cochairmen of Eads, Arnaud Lagardere and Manfred Bischoff, Thursday said in a release that "it would not be in the interest of the company to change corporate governance or enlarge the group to industrial shareholders".

Daimler Chrysler, Lagardere Groupe and the French and Spanish states together own 51% of Eads and are linked by a shareholder pact.

Russia's demands come at a time when Aeroflot, the country's biggest airline, is reviewing proposals from Airbus and Boeing for a planned acquisition of 22 planes.

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