Chris Jasper/LONDON Andy Nativi/GENOA
BAE Systems and European Aeronautic, Defense and Space (EADS) have submitted their final bids for a tie-up with Italy's Alenia Aeronautica. The Italian Government is expected to choose between the two as early as this week.
The UK company has offered "a global alliance", taking in a wide range of state-owned parent Finmeccanica's interests and centring on a niche military aircraft joint venture which will offer Alenia's Aermacchi subsidiary the lead in next-generation trainers, Flight International can reveal.
Sources close to the BAE bid say the military venture, with sales of €3 billion ($2.9 billion), will take in trainer aircraft, consolidating two of the three volume producers, plus military transports and special-mission aircraft. Other aircraft programmes, with sales of €1.8 billion on the UK side and €600 million in Italy, would remain separate, but would be brought within the bounds of a new strategic relationship.
These would include the Harrier, Tornado and Eurofighter programmes (common to the pair), plus the Joint Strike Fighter and Future Offensive Air System of the UK (and potentially Italy), and BAE's links with the Saab Gripen. Sources in Rome say BAE has offered Finmeccanica "leadership of the next generation of jet trainers, with everything centring around Italy".
BAE is also understood to have offered Italy a seat on its board, while placing the strategic relationship under an executive board headed by a chief executive and his deputy, drawn from the joint venture and including the managing directors of the UK and Italian programme divisions.
The EADS offer features a wider ranging 50:50 joint venture, the European Military Aircraft Company, which would have 63% of Eurofighter as opposed to a BAE-Alenia entity's 56%.
Industry sources suggest EADS has also offered Finmeccanica 10% of Germany's work on the US Joint Strike Fighter, should it win the project, although Berlin has yet to sign even for "observer" status.
The sources say Rome has indicated that it also wants a stake in Airbus, and reports indicate that EADS - an 80% shareholder via Aerospatiale Matra, CASA and DaimlerChrysler Aerospace - has offered a 5-8% stake, valued at L2,000 billion ($1 billion).
BAE, a 20% Airbus shareholder, says such a move would require its approval and would not be connected to the Alenia bids. The UK company appears willing, however, to push an Airbus stake and workshare in Rome's direction.
BAE is also offering Alenia full manufacture of the Eurofighter rear fuselage (now split between the pair), plus other aerostructures transfers. The deal would extend beyond the aerospace arena and would be likely to include Finmeccanica's land and naval weapons systems businesses. The UK company already has a wide ranging joint venture with Finmeccanica - Alenia Marconi Systems - in the defence electronics sector.
Rome, which must choose a partner for Alenia to clear the way for Finmeccanica's privatisation, is unlikely to decide solely on industrial merit, but also on political and strategic factors. BAE pitches its bid as being more global while offering better access to the USA (Alenia is a big Boeing contractor), and more coherent, given EADS' complex management structure. Dassault's position as an EADS subsidiary competing in the combat aircraft market is also seen by some as a complicating factor. EADS responds with the argument that it is at the centre of Europe's consolidated industry.
The successful bidder is expected to take a stake of about 25% in Alenia Aeronautica.
• The European Commission (EC) has authorised the formation of the Astrium space consortium, bringing together Matra Marconi Space and the space component of DaimlerChrysler Aerospace. The EC has attached minor conditions, including the sale of Matra Marconi's mechanical-wheels operations.
The merger was announced in May 1997 and creates the world's third-largest space contractor, with annual sales of $2.1 billion. Alenia's space activities are also expected to be merged into Astrium. A further decision is expected soon from Brussels on whether it will approve creation of the EADS group.
Source: Flight International
