Negotiations continue in Socata, Daher pairing

 - July 30, 2008, 9:01 AM

Recent industry scuttlebutt that Daher Aerospace will take a majority stake in EADS Socata is likely to be confirmed next month following “exclusive negotiations” between the two companies announced last month. Although an EADS spokesman said the negotiations would not be complete before next month, French business daily Les Echos reported that EADS would keep 30 to 40 percent of Socata’s share capital, selling the rest and giving operational control to Daher as majority partner.

A tie-up between the two companies has been the subject of speculation for months. Socata CEO Jean-Michel Leonard said in January that his company had an exclusive deal with Daher to bid for packages of work on the A350 that required Socata to provide investment of ?100 million ($155 million). The companies were awarded a contract to provide the landing-gear doors for the new Airbus A350XWB. Socata also has a separate bid outstanding to supply engine pylons for that aircraft.

The tie-up plans could include launch of the twin-engine turboprop that Socata has floated and development of its maintenance/support activity. The EADS subsidiary has expertise in fuselage construction but lacks the financial resources to keep up with demand for lighter-weight, more fuel-efficient equipment. It has been evaluating development of a larger business turboprop or jet and seeking financial or industrial partners to develop the aircraft.

Although the company’s healthy order book has lifted it into profit after four years in the doldrums, EADS chief executive Louis Gallois said in January that Socata could not develop further without outside support. Daher is one of two companies considered a potential future partner for Socata; Piaggio was the other.

“Bringing together Daher and EADS Socata would allow the creation of a major [player] in the area of aerostructures and business aviation and development of joint projects in these two areas, in particular with regard to the A350, for which EADS Socata Daher would be a tier-one partner,” according to EADS.

Daher, a fast-growing, French family-run holding company that also has interests in the automotive, defense and nuclear industries, has made expansion of its aerospace business a priority. Revenues for this year are forecast to exceed €600 million ($900 million). Its aerospace activity includes composite structures, fluid distribution and cabin insulation products for commercial and business aircraft and civil and military helicopters.؀