Airbus, Safran finalize space launchers
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[June 30, 2016]
PARIS (Reuters) - Airbus Group
<AIR.PA> and Safran <SAF.PA> pledged on Thursday to make Europe
competitive in the face of U.S. low-cost rival SpaceX as they completed
a deal to merge their space launcher activities.
The two aerospace groups said they were closing a deal that paves
the way for the next generation of European rocket, the Ariane 6,
which will make its first flight in 2020 and be used to put
commercial and military satellites into orbit.
The long-awaited deal calls for the integration of industrial
assets, turning their existing Airbus Safran Launchers venture into
an operational concern with 8,400 employees in France and Germany.
The heads of both companies pledged to focus on making the venture
competitive after Europe's position in the commercial launch market
was threatened by Elon Musk's Space Exploration Technologies, or
SpaceX, which intends to offer cut-rate launch services by re-using
Under the final deal, French engine maker Safran will pay Airbus
Group 750 million euros ($832 million) to ensure an equal 50/50
ownership split in the new venture -- slightly less than a
previously expected figure of 800 million..
"They needed to complete this deal so that they are ready to design
an entire launcher for civil customers rather than government
requirements, forcing the agencies to accept what they have done for
their customers rather than work with what governments want," an
analyst said, asking not to be named.
The deal had earlier been held up for months as the two companies
and the French government debated how the payment to Airbus should
be treated for tax purposes.
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An Airbus logo is pictured on the company booth during the European
Business Aviation Convention & Exhibition (EBACE) at Cointrin
airport in Geneva, Switzerland, May 24, 2016. REUTERS/Denis
French tax regulations are not easily applicable to a partnership of
equals in which both companies view the stake as strategic, and are
locked in for the long term, so a compromise was reached sparing
Airbus a hefty tax bill.
Separately, the Safran board will meet on Thursday to make a
preliminary selection from a dozen offers for its Morpho biometrics
and security business, sources told Reuters on Wednesday.
(Reporting by Tim Hepher; editing by Michel Rose and Keith Weir)
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