Early last week, Russia's Vneshtorgbank made an announcement guaranteed to give former Cold Warriors a shiver down their spines: It's buying a stake in European Aeronautic, Defense & Space (EADS).
"The Russians are coming! The Russians are coming!"
Calm down. It's only a 5% stake so far -- with an admitted emphasis on "so far." Russia's former "international trade bank," which is still state-owned, spent nearly $1.2 billion to buy its initial stake in the European defense titan. What's more, a Kremlin official was tapped to float a trial balloon on the subject of buying even more shares. A foreign policy aide to Russian President Vladimir Putin announced that if EADS was willing to give Russia a say in how EADS is run, the Russians might buy as much as a 25% "blocking" stake. (Major corporate decisions require a three-quarters shareholder vote, which gives a 25% owner a veto over such decisions.)
EADS's reaction to Russia's "suggestion" was pretty much the one you would expect after watching the ordealMittalSteel
But a Fool has to wonder whether said "industrial shareholders" feel the same way about EADS. Germany's DaimlerChrysler
So what's a Fool to make of all the buying and selling? My hunch is this: Theoretically, EADS management could easily find itself with a major new "industrial shareholder" sitting on its board. There are enough shares floating around these days that Vneshtorgbank -- or whatever other tool the Kremlin decides to use -- can certainly acquire the desired 25% stake on the open market. That would be bad news for companies like Boeing
The real question, though, is how long it takes for the European Union Competition Commission to step in and put the kibosh on the deal. How long will that take? Ask the general counsel at Microsoft
If you didn't get the allusion, read over a couple of these pieces, and you will: