Says EU Will Maintain Control

Rumors abound, following a Russian state bank's investment -- and a British sell-off -- of European Aeronautic Defense & Space (EADS) stock, that the former Soviet state might seek a controlling interest in the company.

EADS executives say, nay nay, I don't think so...

In a statement to the International Herald Tribune (IHT), EADS' Co-Chairmen Manfred Bischoff and Arnoud Lagardere praised VneshTorgBank's (VTB)$1+ billion investment (slightly over 5% of the company's worth) in EADS, hailing it as an indication of confidence in the future of the company.

They also said, in no uncertain terms, that "it would not be in the best interest of the company to change corporate governance or enlarge the group of industrial shareholders."

Apparently, since Russia's investment, reported earlier this week by ANN, word has circulated in the European press of Russia's desire for more than just a monetary stake in EADS.

The IHT reports Aleksei Fyodorov, chief executive of MiG, the fighter jet maker, said last week that Russia wanted eventually to double its stake in EADS to 10 percent. Meanwhile, Sergei Prikhodko, an aide to the Russian president, Vladimir Putin, said this week that Russia could insist on acquiring "at least a blocking stake" in EADS over the long term.

EADS' four largest shareholders, DaimlerChrysler, Lagardere, the French government and the Spanish government control 50.5% of its stock. Now that UK's BAE Systems sold their 20% stake in the congolmerate, also reported by ANN, Russia's VTB is the fifth largest shareholder.

All of the chest-beating on the part of EADS' leadership seems to stem from a fear that the recent financial maneuvering may receive a little "political massaging" -- next week Russian President Vladimir Putin and German Chancellor Angela Merkel meet with French President Jacques Chirac in Paris.

FMI: www.eads.com