Germany, Holders Agree on EADS Stake

Associated Press 11.22.06, 7:30 AM ET

The German government has reached an agreement in principle with investors on the country's strategy toward a stake in Airbus parent EADS, and expects the deal's terms to be made public soon, an official said Wednesday.

For weeks, the government has been in talks centering on the fate of a stake in European Aeronautic Defense & Space Co. currently held by DaimlerChrysler AG. The automaker wants to reduce its holding to 15 percent from 22.5 percent - raising concern over how to preserve a delicate French-German balance at EADS.

"The main features of a deal were reached some days ago," Ulrich Wilhelm, a spokesman for German Chancellor Angela Merkel told reporters. "However, there's still the need for further discussion regarding some modalities."

Wilhelm declined to provide any details, or give a specific time frame, but said he is optimistic that the government and investors would jointly make the deal public "soon."

Last week, the government has said that a deal can't be expected before the end of November.

"We are making good progress," Wilhelm said.

The German government had indicated that it was considering buying part of the stake held by DaimlerChrysler through a state-owned bank. However, it has stressed recently that it prefers a solution involving private investors - who have not been identified.

The discussion over the stake comes after Toulouse, France-based Airbus said wiring problems with the flagship A380 superjumbo would delay its delivery by two years and announced a radical restructuring program.