EADS plans to merge military, space units

THE European Aeronautic, Defence and Space Company (EADS) will streamline its military and space product line-up as it integrates activities as part of a revamp that will adopt the Airbus name across the group.

“You are going to see, over time, probably a slight simplification and rationalisation of the portfolio,” Christian Scherer, head of strategy at the Cassidian defence unit, said yesterday in London. “The Cassidian portfolio is extremely complex and could benefit from simplification.”

Cassidian, with more than 1,000 products, may cease some activities and focus principally on aerospace, which may lead to the restructuring of maritime offerings, he said. Cyber activities will remain part of the business.

EADS CEO Tom Enders said in July the firm would adopt the name of its commercial aircraft unit Airbus for the entire group and merge defence and space activities to help weather shrinking demand. The Airbus name is supposed to help drive exports by raising market recognition.

Cassidian and Astrium, the two units being combined in Airbus Defence & Space, are already undergoing portfolio reviews to determine what can be abolished, Mr Scherer said.

The merger of defence and space activities should be completed by the middle of next year, Mr Scherer said, adding that the timeline is tight given the complexities. The management lineup should be settled this year so that from January operations will be focused on the new structure. Eliminating some positions will help to yield cost cuts, he said.

The combination of defence and space assets is not a precursor to revive merger efforts with BAE Systems, Mr Scherer said. The two companies attempted a merger last year but failed amid German opposition.