Airbus SE — M&A Activity 2012

Sep 12, 2012

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Ad-hoc | 12 September 2012 18:17

European Aeronautic Defence and Space Company EADS N.V.: Response to BAE Systems plc Announcement

European Aeronautic Defence and Space Company EADS N.V. / Key word(s): Statement

12.09.2012 18:17

Dissemination of an Ad hoc announcement according to § 15 WpHG, transmitted
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The issuer is solely responsible for the content of this announcement.

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Ad-hoc release, 12 September 2012

NOT FOR RELEASE OR PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY
(IN WHOLE OR IN PART) IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO
WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF ANY JURISDICTION

Response to BAE Systems plc Announcement

Further to recent speculation and to BAE Systems plc's announcement today,
EADS NV confirms it is in discussions regarding a possible combination of
the BAE Systems plc and EADS NV businesses as described in BAE Systems
plc's announcement attached below.

The possible combination is subject, amongst other things, to the approval
of the Board of EADS and there can be no certainty that these discussions
will lead to a transaction. A further announcement will be made as
appropriate.

About EADS

EADS is a global leader in aerospace, defence and related services. In
2011, the Group - comprising Airbus, Astrium, Cassidian and Eurocopter -
generated revenues of EUR 49.1 billion and employed a workforce of over
133,000.

Contacts:

For Media:

Rainer Ohler, Head of Group Communications
Tel: +33 (0)5 81 91 81 38

Martin Agüera, Interim Head of Media Relations
Tel: +49 (0)89 607 34735

Matthieu Duvelleroy/Jacques Rocca, Media Relations France
Tel: +33 (0)1 42 24 24 25

For Investors:

Philippe Balducchi, Head of Investor Relations
Tel: +33 (0)1 42 24 28 00

Julie Kitcher, Institutionals and analysts
Tel: +33 (0)1 42 24 26 36

www.eads.com

This document does not constitute an offer for sale of any securities or an
offer or an invitation to purchase any such securities in the United
States. The securities referred to herein may not be offered or sold in the
United States absent registration under the US Securities Act of 1933, as
amended (the 'Securities Act'), or another exemption from, or in a
transaction not subject to, the registration requirements of the Securities
Act. Any public offering of securities to be made in the United States will
be made by means of a prospectus satisfying applicable requirements that
may be obtained from EADS or BAE Systems, as applicable, and that will
contain detailed information about EADS and BAE Systems and their
respective management, as well as financial statements. To the extent an
exemption from registration under the Securities Act is not available for
any offering of securities by either EADS or BAE Systems, such offering
will be registered under the Securities Act. If and when the parties enter
into a definitive agreement, transaction documents will be made available
to EADS and BAE Systems shareholders by EADS and BAE Systems and, if
required, will either be furnished to or filed with the SEC. Holders of BAE
Systems securities or of EADS securities who are US persons or who are
located in the United States are urged to read such documents if and when
they become available before they make any decision with respect to any
combination transaction. If such documents are furnished or filed with the
SEC, they will be available free of charge at the SEC's web site at
www.sec.gov. Nothing in this document shall be deemed an acknowledgement
that any SEC filing is required or that an offer requiring registration
under the Securities Act may ever occur in connection with the possible
business combination transaction described herein.'

BAE SYSTEMS ANNOUNCEMENT

THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN ANNOUNCEMENT OF
A FIRM INTENTION TO MAKE AN OFFER UNDER RULE 2.7 OF THE CITY CODE ON
TAKEOVERS AND MERGERS. THERE CAN BE NO CERTAINTY THAT A
TRANSACTION WILL BE IMPLEMENTED.

NOT FOR RELEASE OR PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY
(IN WHOLE OR IN PART) IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO
WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF ANY JURISDICTION.

12 September 2012

RESPONSE TO SHARE PRICE MOVEMENT

Further to the recent movement in BAE Systems's share price, BAE Systems
plc (BAE Systems) and EADS N.V. (EADS) confirm that they are in discussions
regarding a possible combination of their businesses. This potential
combination would be implemented through the creation of a dual listed
company structure, under which both companies would operate as one group by
means of equalisation and other agreements but would be separately listed
on their existing exchanges.

The discussions between the parties envisage that BAE Systems shareholders
would own 40% and EADS shareholders 60% respectively of the enlarged group.
It is contemplated that there would be a unified board and management
structure with identical boards and executive committees at each of BAE
Systems and EADS.

BAE Systems and EADS have a long history of collaboration and are currently
partners in a number of important projects, including the Eurofighter and
MBDA joint ventures. The potential combination would create a world class
international aerospace, defence and security group with substantial
centres of manufacturing and technology excellence in France, Germany,
Spain, the UK and the USA.

BAE Systems and EADS operate highly secure and sensitive defence businesses
in the USA, the UK, France, Germany, Spain, Saudi Arabia and Australia,
amongst other countries. Discussions have therefore been initiated with a
range of governments about the implications of the potential transaction.
Under the transaction structure being discussed between the parties, BAE
Systems and EADS envisage that certain of their defence activities would be
ringfenced with governance arrangements appropriate to their strategic and
national security importance, particularly in the USA, given the importance
of that market to the enlarged group. In addition, subject to receiving
appropriate shareholder approvals, the parties envisage issuing special
shares in BAE Systems and EADS to each of the French, German and UK
governments to replace the existing UK government share in BAE Systems and
the stakeholder concert party arrangements in EADS.

BAE Systems and EADS believe that the potential combination of their two
businesses offers the prospect of significant benefits for customers and
shareholders of both companies. These benefits include cost savings, such
as from procurement and sourcing efficiencies available to the enlarged
group, and substantial new business opportunities.

BAE Systems and EADS have historically had different dividend policies with
BAE Systems paying a higher proportion of its earnings in dividends. To
better align the parties' payout ratios, should the transaction proceed, it
has been agreed that EADS would pay £200m to its shareholders prior to
completion. BAE Systems and EADS's normal dividend payments in respect of
2012 would be unaffected. In respect of 2013, assuming that the combined
earnings are broadly in line with current expectations, it is envisaged
that the combined group would declare dividends such that BAE Systems
shareholders would receive an equivalent amount to that declared in respect
of 2012. This would represent a material increase for EADS shareholders by
comparison with current market expectations. The dividend policy for 2014
and beyond would be a matter for the board of the combined group, which is
expected to balance the importance of dividends to shareholders with the
combined group's future earnings potential, investment requirements and
continuing need for a strong balance sheet.

Any agreement on the terms of a potential combination will require approval
by the boards of EADS and BAE Systems. Prior to any such agreement, EADS
will inform the relevant bodies representing the interests of its employees
in accordance with applicable laws and regulations. If, after completion of
the processes described above, EADS and BAE Systems reach definitive
agreement on the terms of any combination, completion would be subject to,
amongst other things, a number of governmental and regulatory approvals,
the approval of ordinary shareholders of both BAE Systems and EADS and
certain conditions that are customary for a transaction governed by the
City Code on Takeovers and Mergers (the Code). There can be no certainty
that the discussions will ultimately lead to a transaction.

In accordance with Rule 2.4(c) of the Code, both parties or EADS are/is now
required, by no later than 5:00 p.m. London time on 10 October 2012, to
either announce a transaction in accordance with Rule 2.7 of the Code or
announce that they or EADS no longer intend to pursue a transaction, in
which case the announcement will be treated as a statement to which Rule
2.8 of the Code applies. The deadline can be extended with the consent of
the Panel in accordance with Rule 2.6(c) of the Code.

BAE Systems confirms its intention to request an extension to the deadline
from the Panel if it and EADS are still in discussions at that time.

Although no revision is expected, for the purposes of 2.5 (a) of the Code,
EADS reserves the right to amend or adjust the terms of the possible
transaction i) in the event of the announcement of a competing transaction
or of a possible competing transaction involving BAE Systems or ii) with
the recommendation of the board of BAE Systems.

A further announcement will be made as appropriate.

Enquiries:

BAE Systems plc

For Investors:

Andrew Wrathall, Head of Investor Relations
Tel: +44 (0) 1252 383 455

For Media:

Charlotte Lambkin, Group Communications Director
Tel: +44 (0) 1252 383 836

John Suttle, Senior Vice President, Communications
Tel: +1 (703) 344 8508

EADS N.V.

Rainer Ohler, Head of Group Communications
Tel: +33 (0)5 81 91 81 38

Martin Agüera, Interim Head of Media Relations
Tel: +49 (0)89 607 34735

Matthieu Duvelleroy, Media Relations France
Tel: +33 (0)1 42 24 24 25

In accordance with Rule 2.10 of the Code, BAE Systems confirms that,
excluding 338,287,732 ordinary shares of 2.5 pence each held in treasury,
it has in issue 3,249,306,302 ordinary shares of 2.5 pence each. The ISIN
for the ordinary shares is GB0002634946.

A copy of this announcement will be made available on BAE Systems's website
at www.baesystems.com and EADS's website at www.eads.com.

This announcement is made with the approval of EADS.

Disclosure requirements of the Code

As dual listed company structures are subject to the Takeover Code, BAE
Systems plc will now enter an offer period as defined by the Takeover Code.
Under Rule 8.3(a) of the Code, any person who is interested in 1% or more
of any class of relevant securities of BAE Systems or of EADS must make an
Opening Position Disclosure following the commencement of the offer period.
An Opening Position Disclosure must contain details of the person's
interests and short positions in, and rights to subscribe for, any relevant
securities of each of BAE Systems and EADS. An Opening Position Disclosure
by a person to whom Rule 8.3(a) applies must be made by no later than 3.30
pm (London time) on the 10th business day following the commencement of the
offer period. Relevant persons who deal in the relevant securities of BAE
Systems or EADS prior to the deadline for making an Opening Position
Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in
1% or more of any class of relevant securities of BAE Systems or EADS must
make a Dealing Disclosure if the person deals in any relevant securities of
BAE Systems or EADS. A Dealing Disclosure must contain details of the
dealing concerned and of the person's interests and short positions in, and
rights to subscribe for, any relevant securities of each of BAE Systems and
EADS, save to the extent that these details have previously been disclosed
under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies
must be made by no later than 3.30 pm (London time) on the business day
following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of BAE Systems or EADS, they will be deemed
to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by BAE Systems and EADS and
Dealing Disclosures must also be made by BAE Systems, EADS and by any
persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant
securities Opening Position Disclosures and Dealing Disclosures must be
made can be found in the Disclosure Table on the Takeover Panel's website
at www.thetakeoverpanel.org.uk, including details of the number of relevant
securities in issue, when the offer period commenced and when any
offeror was first identified. You should contact the Panel's Market
Surveillance Unit on
+44 (0)20 7638 0129 if you are in any doubt as to whether you are required
to make an Opening Position Disclosure or a Dealing Disclosure.

Notice to US Investors

This announcement does not constitute an offer for sale of any securities
or an offer or an invitation to purchase any such securities in the United
States. The securities referred to herein may not be offered or sold in the
United States absent registration under the US Securities Act of 1933, as
amended (the 'Securities Act') or another exemption from, or in a
transaction not subject to, the registration requirements of the Securities
Act. Any public offering of securities to be made in the United States will
be made by means of a prospectus satisfying applicable requirements that
may be obtained from EADS or BAE Systems, as applicable, and that will
contain detailed information about EADS and BAE Systems and their
respective management, as well as financial statements. To the extent an
exemption from registration under the Securities Act is not available for
any offering of securities by either EADS or BAE Systems, such offering
will be registered under the Securities Act. If and when the parties enter
into a definitive agreement, transaction documents will be made available
to EADS and BAE Systems shareholders by EADS and BAE Systems and, if
required, will either be furnished to or filed with the SEC. Holders of BAE
Systems securities or of EADS securities who are US persons or who are
located in the United States are urged to read such documents if and when
they become available before they make any decision with respect to any
combination transaction. If such documents are furnished or filed with the
SEC, they will be available free of charge at the SEC's web site at
www.sec.gov. Nothing in this document shall be deemed an acknowledgement
that any SEC filing is required or that an offer requiring registration
under the Securities Act may ever occur in connection with the possible
business combination transaction described herein.

UK Listing Authority (UKLA)

The proposed transaction, if completed, would be classified as a reverse
takeover of EADS by BAE Systems under the Listing Rules of the UKLA, and an
application would therefore need to be made in due course to the UKLA and
the London Stock Exchange for the Ordinary Shares of the BAE Systems head
of the dual listed company to be admitted to the Official List and to
trading on the London Stock Exchange respectively. The eligibility of the
combined group for admission to the Official List has not yet been agreed
with the UKLA and discussions with the UKLA regarding eligibility will
commence in due course.

Shareholders are referred to regulatory information that EADS publishes via
www.eads.com/eads/int/en/investor-relations/investor-news.html

Other jurisdictions

This announcement does not constitute an offer for sale of any securities
or an offer or an invitation to purchase any such securities in any other
jurisdictions.

No profit forecasts

No statement in this announcement is intended as a profit forecast and no
statement in this announcement should be interpreted to mean that earnings
per BAE Systems or EADS shares for the current or future financial years
would necessarily match or exceed the historical published earnings per BAE
Systems or EADS share.

12.09.2012 DGAP's Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Media archive at www.dgap-medientreff.de and www.dgap.de

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Language: English
Company: European Aeronautic Defence and Space Company EADS N.V.
P.O. Box 32008
2303 DA Leiden
Netherlands
Phone: 00 800 00 02 2002
Fax: +49 (0)89 607 - 26481
E-mail: ir@eads.net
Internet: www.eads.com
ISIN: NL0000235190
WKN: 938914
Indices: MDAX
Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
in Berlin, Düsseldorf, Hamburg, Hannover, München, Stuttgart

End of Announcement DGAP News-Service

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