Airbus Group is to sell its commercial and para-public communication businesses, including the Professional Mobile Radio (PMR) unit formerly known as Cassidian and the commercial satellite communications services activities, which operate under the Astrium brand.
After a detailed and comprehensive portfolio assessment, Airbus Defence and Space said today (16 September 20145) that it has defined space (launchers and satellites), military aircraft, missiles and related systems and services as its future core businesses. These are the areas in which the Division will further invest to strengthen its leading position.
Some business areas are identified as divestment candidates as they do not fit the strategic goals and for which the company sees possibilities to increase their development potential in different set-ups.
The company said it believes its PMR and commercial satellite communications services activities will have a better chances for growth and market success in different ownership structures.
An Airbus spokesperson told Wireless: ‘The sale is in line with the strategy announced a year ago when the Group said it want to concentrate on “making things fly” and that it would undertake a portfolio review. The conclusion was that it might be better to sell these parts of the Division to another company more suited to developing it.’
The spokesperson said that Airbus is also reacting to changes in the market, where land mobile radio is moving away from its traditional narrowband two-way radio standards and is developing towards more commonly used broadband LTE communication solutions.
The spokesperson added that the company wanted to assure its partners, such as Alcatel-Lucent with which it is developing public safety communication solutions using 4G LTE technology, that it will continue to work with them. The spokesperson indicated that Airbus is looking to sell these units as a whole and not piecemeal.
Airbus Defence and Space further intends to sell some of its subsidiaries and participations, including Fairchild Controls, Rostock System-Technik, AvDef, ESG and Atlas Elektronik.
For the Division’s Security and Defence Electronics businesses further industrial alternatives will be explored in order to best develop and position these businesses for future growth and value creation.
"The portfolio decisions for Airbus Defence and Space are the logical follow-up to our Group Strategy Review in 2013. They will foster the strengths of the division and, hence, will result in an even stronger focus on our Group's core activities, aeronautics and space," said Tom Enders, CEO of Airbus Group.
“Given the tight budgetary situation in our home countries and increasing competition on global markets, the portfolio review is an essential element to further develop our defence and space business and to ensure its competitiveness,” said Bernhard Gerwert, CEO of Airbus Defence and Space.
“We have identified those segments where this is an achievable target and those where we should explore alternative options. In short, the portfolio review is a logical next step in the overall transformation process. It will strengthen Airbus Defence and Space’s business core, unlocking its full potential to drive the defence and space industry forwards, particularly on critically important international growth markets.
“All these decisions will of course respect our national security agreements and will be discussed with employee representatives in a fair and open way”, added Bernhard Gerwert.
The first milestone of the Division’s transformation, as announced last year, was the reorganisation of the three former business entities – Astrium, Airbus Military and Cassidian – into one single organisation. This target was achieved on 1 July 2014, according to plan.
A next significant milestone was to secure the future of the Division’s space launcher business, which received a major boost through the planned joint venture with Safran, as announced in June 2014, and which is currently being further developed.
Airbus Defence and Space is a division of the Airbus group, formed by a merger between the businesses of Cassidian, Astrium and Airbus Military a year ago. This new division is Europe' number one in the space and defence industry, the world's number two in the space industry and is one of the world's top ten defence industry companies. It has annual revenues of around €14 billion with a workforce of some 40,000 employees.