LONDON (AFX) - BAE Systems is selling its 20 pct in Airbus to EADS, the aerospace and defence company that already owns the other 80 pct of the passenger jet maker, according to overnight news reports.
BAEs board made the Airbus decision on Wednesday and will approach the Department of Trade & Industry today, the Financial Times reported.
A BAE sale has been the centre of speculation for months. The company has decided to make the divestment now to take advantage of the booming market for passenger jets.
EADS valued the BAE stake in Airbus at 3.5 bln eur in its annual report, but Goldman Sachs said BAE will hold out for a substantial premium and might be unwilling to sell for less than 4.5 bln stg, the FT reported.
Earlier this week, DaimlerChrysler and Lagardere each sold 7.5 pct of EADS.
The newspaper quoted a defence industry insider as saying: 'This (BAE disposal) has been on the cards for a while. It is really just a question that they need to get the UK government reasonably squared away.
BAE, which has had an option since 2000 to sell its Airbus stake to EADS at open market value, has said it plans to make more acquisitions of defence companies in the US.
According to the Independent, CEO Mike Turner is due to meet Alan Johnson, the US Secretary of State for Trade and Industry, this morning to inform him of the divestment.
Airbus UK, with its plants at Filton and Broughton represents the core of the UK civil aerospace industry, employing directly 13,000 people and supporting up to 135,000 jobs in the supply chain and other parts of the UK economy.
The BBC said union leaders are seeking urgent talks with BAE, quoting Ian Waddell, of Amicus union, as saying there would be 'tens of thousands of worried people'.
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