German State Banks Plan EADS Investment

Associated Press

Associated Press 01.22.07, 8:38 AM ETTwo state-owned banks will participate in a consortium that plans to buy a 7.5 percent stake in EADS, the parent company of aircraft maker Airbus, from DaimlerChrysler AG, an official said Monday.

The governor of the southwestern state of Baden-Wuerttemberg, Guenther Oettinger, said LBBW and L-Bank will take part, but did not specify the size of the stakes they might take.

German officials have been involved in talks with investors over how DaimlerChrysler (nyse: DCX - news - people ) could reduce its shareholding in EADS to 15 percent from 22.5 percent without jeopardizing the balance between German and French interests in EADS.

Chancellor Angela Merkel's office has said that a solution has been found that could be announced by the end of January. Neither the government nor DaimlerChrysler has provided details, saying the specifics are still being worked out.

However, German media have reported that the consortium includes several German and foreign banks and that the German-U.S. automaker will retain the voting rights.

In a statement, Oettinger praised the "determined joint effort by the federal government, states, public and private banks" but also did not name the investors involved. He said the solution was "an encouraging signal for the preservation of jobs."

An Airbus plant making interior fittings for planes at Laupheim, in Baden-Wuerttemberg, employs some 1,200 people. DaimlerChrysler also is based in the state.

Another German state, Lower Saxony, last week said it would buy a stake of 0.375 percent in EADS. It also cited a desire to safeguard jobs in the region.