Goldman Sachs 2012 Annual Report Download - page 18
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16 Goldman Sachs 2012 Annual Report
With Goldman Sachs’ assistance,
Daimler AG sells a big stake in EADS,
the European aerospace giant. “Daimler still
had a significant
ownership stake
in the business,
but their strategy
had evolved.
It was on their
agenda for some
time to further
reduce that stake,
but the question
was, how?”
After more than a decade as a major shareholder
in EADS, a global leader in aerospace and defense
services, Daimler’s management wanted to further
increase focus on its core business of making some
of the world’s finest cars and trucks. Relinquishing
parts of its stake in EADS would require collaboration
on both financial and political fronts.
The challenge, above all, was maintaining the delicate
balance that made EADS possible from the beginning.
A transnational conglomerate, the company was based
primarily on a partnership between France, Germany
and Spain. The Spanish component was represented by
the Spanish government; the French component was
represented by the French government and the media
group Lagardère; and the German component was
represented by Daimler.
To facilitate a reduction of Daimler’s stake in EADS,
any transaction would have to ensure the “balance”
between French and German interests. As a prerequisite,
the German government agreed to become a shareholder
of record through its Kreditanstalt für Wiederaufbau
(KfW), the state-owned lender, while all three
governments at the same time agreed to limit their
overall ownership in EADS.
In December 2012, all involved parties came to an
agreement that enabled all of the above — including
a final ownership structure that envisions a balanced
interest between the German and French sides,
enables Daimler to sell approximately 61.1 million
shares and helps to significantly increase EADS free
float. As joint bookrunner, Goldman Sachs executed
an accelerated bookbuild offering to which investors
across Europe, the United States and Asia quickly
signed on.
Strategy
How can a company increase focus
on its core business if it can’t shed
non-core investments?