Airbus Group (AIR) Chief Executive Officer Tom Enders said he’s open to merger talks on the company’s space unit and would contemplate taking control of the MBDA missile business as he revamps non-airliner activities.

While satellite and launcher operations are “integral” to Airbus, consolidation proposals for space assets from within Europe or worldwide would be considered, he said yesterday in an interview at the site of the new group base in Toulouse, France.

“There are lots of interested and competent people when it comes to space around the globe,” Enders said, adding on MBDA, which has three investors, that Airbus won’t exit its minority holding and that, “if anything, we’re a buyer.”

Enders last month announced 5,800 job cuts resulting from a combination of the space and defense units of the former European Aeronautic, Defence & Space Co. While the Airbus jet brand whose name the whole company has adopted is faring well, the CEO is seeking to boost competitiveness at operations where shrinking government spending has diminished sales prospects.

The satellite-building venture, formerly known as Astrium, is one of the top two in Europe with Thales Alenia Space, a venture of France’s Thales SA (HO) and Finmeccanica SpA (FNC) of Italy. Other major players include Boeing Co. (BA) and Lockheed Martin Corp. (LMT)

Open Mind

“We certainly wouldn’t reject any discussion on further European consolidation if it’s going to take place,” Enders said at a ground-breaking ceremony. “But we must not have the Pavlovian reflex to say the answer is always European.”

Via Astrium, Airbus owns a 30 percent stake in European space-launch provider Arianespace SpA, which counts French state space agency CNES as its biggest single investor. Any review of possible combinations with others would only happen after Airbus has worked through the restructuring this year, Enders said.

Airbus said Nov. 21 it was aiming to buy a stake in Avio SpA’s space-propulsion business as part of a breakup of the Italian company by private equity firm Cinven Ltd. which saw General Electric Co. (GE) buy an aircraft-engine arm. Cinven holds 81 percent of Avio and Finmeccanica owns 14 percent.

Airbus would be interested in buying out either of its partners in MBDA should the opportunity arise, the CEO said. His company and BAE Systems Plc (BA/), Europe’s top armsmaker, each own 37.5 percent stakes, while Finmeccanica holds 25 percent.

Innovation Boost

“We’re definitely not a seller,” Enders said, declining to reveal whether any discussions are under way regarding the venture, which had sales of about 3 billion euros ($4.1) in 2012 and competes primarily with Walthman, Massachusetts-based Raytheon Co. (RTN)

BAE could sell some core businesses including the MBDA holding to boost investor returns, London-based Bank of America Merrill Lynch analyst Celine Fornaro said in a note yesterday. The London-based company said it does not comment on merger and disposal speculation.

Airbus rose as much as 35 cents, or 0.6 percent, to 56.45 euros in Paris. BAE advanced as much as 1.1 percent and was trading at 432.60 pence as of 8:24 a.m. in London.

Enders became CEO of EADS in mid-2012 and almost immediately sought to merge it with BAE to create a balance between commercial aerospace and defense. After the bid failed amid opposition from the German government, he moved to restructure the shareholder base to increase the number of widely held shares.

Dropped Plan

Enders has also dropped efforts to bolster the non-airliner business, recognizing Airbus — which generates two-thirds of sales — as the chief driver of growth and renaming the company to reflect that.

The group’s new 100 million-euro base, due to open in 2016, “will make us increasingly innovative and competitive” Enders told employees before climbing aboard a digger to lift the first earth. “The people running, steering, supervising the business have to be close to the business.”

EADS had dual headquarters in Paris and in Munich, hundreds of miles from the Airbus unit’s office and factories, which have been located in Toulouse since the planemaker was created more than 40 years ago.

The new base is down the road from the jetliner division’s offices and across the runway from its final assembly plant, where jets including the A380 superjumbo are bolted together. Astrium also has satellite design and testing facilities in Toulouse.

(Source: Bloomberg)