European Aeronautic, Defence & Space Co. nominated Denis Ranque, a former Chief Executive Officer of Thales SA, to become its new chairman at a March 27 shareholder meeting.
Ranque, 61, will join the EADS board with Tom Enders remaining CEO, the Toulouse, France-based company said today in a statement. Ranque will replace Arnaud Lagardere following an investor reshuffle last year.
The new board, which would include former European Central Bank Chairman Jean-Claude Trichet, will work with Enders to define a new strategy for Europe’s biggest aerospace and defense company following a failed merger attempt with BAE Systems Plc. The plan could see EADS scale back defense ambitions when its unveiled mid-year.
Ranque is “well connected particularly within the French establishment” and is an interesting appointment, said Zafar Khan, a London-based analyst at Societe General who has a buy rating on EADS shares. “Some people say that operationally he could have done better at Thales, but this isn’t an operating position.”
Thales is a major provider of military electronics including for France’s Rafale combat aircraft. EADS has expressed interest in taking over Thales in the past, though the moves were blocked by the French government, which owns 27 percent.
EADS shareholders of record at the close of trading on Feb. 27 will also be asked to approve a buyback of as much as 15 percent of company shares, which would be canceled. The move is aimed at shoring up the price as institutional shareholders Daimler AG and Lagardere SA move to reduce their stakes.
EADS stakeholders in December agreed the largest revamp of the company’s governance structure since its inception in 2000, clearing the way for institutional shareholders to exit, reducing government direct control in operational affairs, and increasing the free-float in the company’s shares.
Some government coordination requirements remain. EADS, which owns a stake in French combat aircraft maker Dassault Aviation, is promising the French government the first right to purchase any shares it may sell.
EADS shares closed up 0.6 percent to 35.18 euros in Paris trading before the announcement, valuing the business at 29.1 billion euros ($39.1 billion).
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