European Aeronautic Defence and Space Co. or EADS NV (EADSY.PK, EADSF.PK) said Wednesday that its shareholders have approved fifteen resolutions that will enable the Airbus parent to overhaul its corporate governance structure, including a revamped board of directors and also limiting government involvement in the company's daily operations.
The resolutions are seen as making the most sweeping changes to the company's corporate structure since its formation more than 12 years ago. The resolutions are required by EADS to authorize the completion of the multiparty agreement announced on December 5, 2012, that will normalize and simplify the governance of the company.
The company's board and core shareholders reached an agreement in December aimed at normalizing and simplifying the governance of the company, while securing a shareholding structure that allows France, Germany and Spain to protect their legitimate strategic interests.
EADS was formed in 2000 by the merger of Aérospatiale-Matra of France, DaimlerChrysler Aerospace AG or DASA of Germany, and Construcciones Aeronáuticas SA of Spain. However, decision making at the the maker of Airbus passenger planes, Ariane rockets and Eurofighter combat jets was hampered by national interests, which more than offset business objectives. EADS now plans to strictly limit government involvement in the company's daily operations.
France, Germany and Spain have agreed on a capped government shareholding in EADS of about 12 percent, 12 percent and 4 percent respectively, with Germany taking a direct stake in EADS for the first time. Current core industrial shareholders German carmaker Daimler AG and French media company Lagardere SCA will largely reduce their stakes in EADS.
EADS said that at its extraordinary general meeting or EGM in Amsterdam earlier on Wednesday, shareholders approved resolutions, among others, for the the election of new directors to the company's board. They also approved a plan to repurchase up to 15 percent of EADS' outstanding share capital at a maximum price of 50 euros per share and to cancel shares purchased through the buyback.
Following shareholder approval, EADS will appoint the following directors to its board. They include Manfred Bischoff, Ralph Crosby, Tom Enders, Hans-Peter Keitel, Hermann-Josef Lamberti, Anne Lauvergeon, Lakshmi Mittal, Sir John Parker, Michel Pébereau, Josep Piqué i Camps, Denis Ranque and Jean-Claude Trichet.
The future EADS board will comprise 12 members, including a chairman, a chief executive officer and at least eight independent non-executive directors. The majority of directors as well as two thirds of the members of the executive committee will be EU nationals.
The members of the new board will meet informally after the EGM to prepare the election of the chairman of the board, the nomination of the board committees, and adoption of its new rules. These matters will be decided at a board meeting immediately after the completion of the agreement when the new board becomes effective.
Upon completion of the multiparty agreement, the EADS board is expected to decide whether to undertake a share buyback program, including determining the size, timing and form of such a program and the extent to which the company may participate in possible core shareholder offerings of EADS shares, based on the prevailing market conditions.
Under the new governance scheme, no veto right will be given to any group of directors in the board or to any shareholder at the shareholders' meeting. Eventually, the free float of EADS shares will increase to over 70 percent from 49 percent, including any excess shares warehoused by the French, German or Spanish States and the shares that would still be owned by Daimler and Lagardère until all those shares are ultimately sold.
Ahead of the EGM, EADS said it has made an amendment to the multiparty agreement dated December 5, 2012. The company said that at the request of the Spanish state holding SEPI, it would be allowed to sell up to 1.15 percent of EADS' share capital between completion and close of business on April 9, 2013, to come close to their future stake of 4 percent.
In Paris, shares of EADS are trading at 39.56 euros, down 1.36 euros or 3.32 percent on a volume of 2.46 million shares.
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