BRUSSELS/BERLIN—The European Commission warned France and Germany on Friday not to introduce "golden shares" at aerospace group EADS as a tool to ward off potential foreign predators.
But Berlin said Brussels was missing the point in how best to protect a flagship group essential to national security.
The issue highlights concerns about how much control foreign investors should be allowed to have over companies such as EADS, which makes the Eurofighter jet, missiles, rockets, helicopters and satellites.
"The general view on golden shares is clear. The European Commission doesn't think golden shares have a place in the single market," European Commission spokesman Oliver Drewes told a regular news briefing when asked about the situation at EADS.
Arguing that free movement of capital is at stake, Brussels has been campaigning against golden shares, which give states special rights in publicly listed companies.
In Berlin, government aerospace coordinator Peter Hintze said Germany, France and EADS' major shareholders had held "good talks" on whether to adopt golden shares but that it was still an open question as to whether an agreement could be reached.
Hintze, who is also a deputy economy minister, dismissed Brussels' opposition to the idea, noting states had a clear right to defend national interests when it came to armsmakers.
"I consider the Commission spokesman's comments to be missing the point," he told Reuters.
German carmaker Daimler AG, a major EADS shareholder, said owners of the Airbus parent had not agreed any steps that could limit the influence of foreign investors.
"There are no decisions yet on this subject and no timetable for a decision," a spokeswoman said, declining further comment.
EADS shares closed down 1.3 percent at 17.50 euros, in line with the French blue-chip index.
Funds in Focus
The Financial Times paper cited people close to the talks as saying France and Germany were finalising changes to corporate by-laws to prevent foreigners building large stakes in EADS.
The French government, French media group Lagardere and Daimler—which jointly control 45 percent of EADS—plan to prevent any investor considered predatory from owning more than 15 percent, the FT said.
The two main options under discussion were awarding golden shares in EADS to Paris and Berlin or adopting poison-pill style defence mechanisms for Dutch-registered EADS, the paper said.
Dubai's sovereign wealth fund bought 3.1 percent of EADS last summer and VEB, a state-controlled Russian bank, took a 5 percent stake in December, triggering a debate about the role of state-backed investors at EADS.
The issue arose again when the Franco-German group last week won part of a $35 billion deal to supply the U.S. military with its Airbus tanker aircraft, defeating arch rival Boeing Co to the chagrin of many U.S. politicians.
A spokesman for French President Nicolas Sarkozy declined to comment on Friday. Sarkozy has vowed to protect French businesses from sovereign wealth funds and private speculators.
Germany is reviewing a law that defends strategic industries and may broaden the number of sectors to which it might apply.
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