Stuttgart-based global auto major Daimler AG has sold 7.5 percent or half its remaining holding in European Aeronautic, Defence & Space Co. (EADS) for $2.17 billion (1.66 billion euros). The premium car maker and owner of Mercedes-Benz played a key role in the setting up of EADS a little over a decade ago.
But EADS has progressively reduced its stake in the aerospace company to place sharper focus on its car and truck manufacturing. Following the deal, Daimler will hold 7.5 percent stake in EADS.
Daimler finance chief Bodo Uebber said in a statement that the sale will contribute "positively to our free cash flow this year."
"We will invest the proceeds of the sale into the global growth of our divisions, our products and the extension of our technological leadership," he said.
Reports say that Daimler sold 61.1 million EADS shares to investors at a price of 27.23 euros each. The placement was oversubscribed. Daimler's sale of EADS shares is also part of an overhaul of the shareholder structure of the parent of planemaker Airbus SAS. Germany will join France in holding 12 percent of EADS. These steps are being taken to eliminate governments' veto rights over EADS business decisions.
With this stake sale, Daimler also frees itself from the obligation of serving as Germany's voice at EADS.
Morgan Stanley and Goldman Sachs were joint bookrunners for Daimler's EADS sale, while JP Morgan was the manufacturer's financial adviser.
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