Airbus to sell few Business Units to improve focus

Airbus to sell few Business Units to improve focus

Airbus Group has disclosed its plans to sell a series of business units as its defense and space division is shifting its focus on military aircraft, missiles, satellites and their launch vehicles.

Declaring the results of a portfolio review, Europe's largest aerospace group brought an end to previous efforts to expand into security activities and put brakes on investments in defense electronics segment.

Europe's defense industry is struggling because of cash shortage and cuts in military spending imposed by the government. European Aeronautic Defense and Space (EADS), later renamed Airbus, replied in 2012 by trying to join Britain's BAE Systems, but the deal was blocked by Germany.

Airbus Group plans to sell six units with combined annual revenues of around 2 billion euros ($2.6 billion), making up about 15% of the defense and space division’s sales.

According to the group, it would sell its Professional Mobile Radio secure communication assets and finalize plans to sell a 49% stake in submarine supplier Atlas Elektronik. It would also think about selling other commercial and non-governmental satellite communications activities.

They are also to sell systems and software company ESG and three smaller units, including U.S.-based environmental systems supplier Fairchild Controls, German cabin simulator maker Rostock System-Technik and AvDef, a small aviation company in southern France that trains fighter pilots.

In early trading, Airbus Group shares decreased 0.7% in line with the broader European market FTEU3.

Bernhard Gerwert, head of the Defense & Space business, said that they came to the conclusion that their division must concentrate on the following core businesses: Space, Military Aircraft, Missiles, and related Systems and Services. Adding to it, Gerwert said that these are the key areas in which they will further invest to make their leading position stronger.

"I want to make clear that this is not just about cutting more jobs or closing more sites, quite the contrary. We’re focusing on certain businesses and are looking for someone who’s willing to develop and invest in these businesses”, said Gerwert.

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