EADS TO EXTEND POWER8 PROGRAMME
Airbus owner EADS is to extend its cost-cutting programme in a bid to diminish the impact of the weak dollar on its business. When the existing Power8 plan expires in 2010, it will be replaced by a new group-wide "Power8 Plus" programme, which is expected to deliver a saving of €1 billion ($1.6 billion) in the period 2011-12. Details of the programme will be presented to EADS's European works council in the autumn. "Power8 Plus targets a more internationalised cost base, compared with a current one dominated by the euro," says EADS, adding that Power8 was "over-performing" and had achieved EBIT contribution of around €400 million in the first half of 2008.
REDUCED COMMUNICATIONS BOOST SAFRAN
French conglomerate Safran, formed in a 2004 merger of aerospace group Snecma and communications group Sagem, has announced first-half profits and a further streamlining of its business. Despite a negative currency impact of €355 million ($557 million), Safran achieved a first-half profit from operations of €474 million, and a first-half profit from recurring operations (excluding capital gains) of €328 million. The latter compares with €311 million for the first half of 2007, though the 2007 figure rises to €381 million if communications are excluded. In January, Safran completed the sale of Sagem Communications to US private-equity firm The Gores Group for an enterprise value of €383 million. Furthering its strategic shift out of communications, it last week agreed to sell its mobile phone business, Sagem Mobiles, to French venture capital firm Sofinnova.
BAE CLOSES IN ON NATIONAL SECURITY FIRM
BAE Systems has made a recommended offer for Detica Group, a UK-based provider of IT services to what BAE terms the national security and resilience (NS&R) sector. At 440p per share, the offer values Detica at £538 million ($1.1 billion). Headquartered at Guildford, UK, Detica counts the Ministry of Defence among its customers. The NS&R sector it serves will double in value to more than £3 billion by 2011, predicts BAE.
EMBRAER TO BOOST PORTUGUESE PRESENCE
Embraer is to invest in two new manufacturing centres in the southern Portuguese city of Evora. One will focus on metallic assemblies and will require investment of €100 million ($157 million) over six years. The other, a composites manufacturing facility, will be funded to the tune of €48 million. Both facilities will be highly automated, in keeping with the Brazilian airframer's lean manufacturing philosophy.
TROUBLED FRONTIER LANDS DIP FINANCING
Private-equity firm Perseus, of Washington DC, has agreed to provide $75 million in debtor-in-possession (DIP) financing to Frontier Airlines, which filed for Chapter 11 bankruptcy protection in April. Under an equity sponsorship arrangement, Perseus has an option to purchase 79.9% of the equity in the reorganised company for $100 million.
B/E ABSORBS HONEYWELL CONSUMABLES UNIT
B/E Aerospace has completed the acquisition of Honeywell's consumable solutions distribution business. The combined businesses are expected to generate more than 50% of B/E Aerospace's operating earnings in 2009.
Source: Flight International
