Transfer of shareholding in EADS N.V. to KfW

Background
Against the background of last year's announcement by Lagardère and Daimler to fully reduce their respective equity stakes in EADS, the key shareholders (i.e. Germany together with KfW, France, Spain, Daimler, Lagardère and EADS) negotiated a new shareholders’ agreement early December. This agreement stipulates, among others, that the (combined) voting rights of Germany, Spain and France shall be reduced from currently just above 50% to less than 30% (the relevant threshold according to Dutch takeover law to avoid a mandatory takeover offer).

To begin with, KfW will enter into the existing shareholders’ agreement. After the necessary vote at the Extraordinary General Meeting of shareholders (planned for March 2013), KfW will join the new shareholders’ agreement. Accordingly, KfW (on behalf of Germany) and France (Sogeade) will each hold stakes in EADS of 12% and Spain (Sepi) of 4% (total of 28%).

The German Federal Government will initially limit its ownership in EADS to 10.2%. The reason is that EADS has announced a share buy-back programme of up to 15% of its outstanding share capital. This programme will also be voted on at the EGM. If fully implemented, Germany’s stake in EADS will correspond to the agreed amount of 12% (otherwise, additional share purchases will be necessary).

Preserving strategic interests
The Federal Government intends to preserve the balance between German and French ownership in EADS and has therefore instructed KfW, in accordance with Section 2 paragraph 4 of the KfW Law, to acquire the necessary EADS shares from Daimler as well as from other investors, who were seeking to divest their stakes in Dedalus (see Transaction background below). The Federal Republic bears all risks and opportunities of this transaction.

Transaction structure
KfW previously held an indirect EADS stake of 0.97% (through its 13% stake Dedalus). The federal states of Hamburg, Bremen, Lower Saxony and Bavaria (22% of Dedalus) have decided to maintain their indirect investments in EADS. In contrast, the "private investors" as well as the state of Baden-Württemberg (L-Bank and LBBW subsidiary) have decided to divest their shareholdings in EADS.

As a result, KfW increased its original stake in Dedalus by a further 65%, that is by 4.83% percentage points to a total (indirect) stake in EADS of 5.8%. The remaining four federal states hold a combined (indirect) stake in EADS of 1.64%.

Additionally, in December 2012, Daimler reduced its stake in EADS by 7,44% by way of an accelerated book building (ABB). KfW acquired approx. 2.76% of the EADS shares in the ABB.

Thus Germany's total shareholding in EADS now amounts to 10.2% with KfW's overall stake currently amounting to 8.56%.