Germany has not approved Airbus defense electronics unit sale to KKR, say sources: Reuters

Two German government sources on Tuesday denied a report in the Handelsblatt newspaper that Berlin had given its consent to sell Airbus Group’s defense electronics unit to two U.S. buyout groups.

One source in the coalition government said the report in the business newspaper was “not accurate.”

Handelsblatt reported on Tuesday that Airbus was close to sealing a deal with KKR and Carlyle and that the German government had given a green light for the sale. It quoted sources close to the negotiations.

A spokeswoman for the economics ministry on Tuesday said Airbus had informed German authorities about an intention to sell part of its defence unit, while declining to comment further.

“We will carefully follow this process together with the defence ministry and conduct talks with Airbus and potential investors,” one government source familiar with the matter told Reuters.
German authorities want to assess what impact a deal could have on jobs and to assess whether key security technologies and competencies would remain in Germany.

The sale is part of a plan by Airbus to dispose of assets with combined revenues of around 2 billion euros ($2.16 billion), following a strategic decision to focus on civil and military aeronautical and space assets in the face of low defence spending in Europe.

Airbus lacks the scale of rivals in defence electronics and hopes to fetch more than 1 billion euros from the sale, sources have said. The company said this month it was making good progress in the sale of its defence electronics unit.

Airbus Group short-listed Carlyle and KKR for the defence electronics unit, after they put up significantly higher offers than rivals, three people familiar with the matter told Reuters last month.

France and Germany own 11 percent each of Airbus Group and Spain controls 4.1 percent.