Arianespace - Who Owns Europe's Rockets?

If you've never heard of Arianespace, they're essentially the go-to launch provider for the European Space Agency, manufacturing the extremely robust and reliable Ariane family of rockets. But as much as I'd love to jump into the details of the Vulcain hydrolox engines or enormous HTPB-powered solid rocket boosters on the Ariane V, today's article appeals more heavily to the investment banker in me - Arianespace's ownership structure!

Arianespace's Ariane 5 in comparison to other famous boosters | Credit: Skrabek

As a former investment banker, a common task I'd often be asked to handle was shareholder ownership analysis; basically, if your client is a company looking to buy out a competitor, wouldn't you like to know who currently owns the target company's shares? In particular, we were looking to answer questions like "what percentage of the shares are owned by the CEO and other key executives?" or "of the institutional investors, are they mostly stable, long-term mutual funds or high-turnover hedge funds?" And for the most part, it was (thankfully!) a straightforward assignment - just pop the stock ticker into Factset or some other handy financial database and slap the output onto a PowerPoint slide!

Here's a perfect example of shareholder breakdown - flashbacks to my old job!!

But where it starts getting hairy is when you have to dive one level deeper than the parent company. What if you need to know the legal structure and ownership breakdown of a subsidiary, joint venture, or other corporate entity? In the US launch market, the most obvious example of this is the United Launch Alliance, which manufactures the extremely reliable Atlas and Delta rocket families that have launched some of the most high-profile NASA scientific payloads (think Curiosity and New Horizons). Thankfully for me, their structure is as easy as it gets! ULA is a joint venture between Boeing and Lockheed Martin, even-steven 50/50!
Formed in 2006 when Boeing's Defense, Space & Security division joined forces with arch-nemesis Lockheed Martin Space Systems 

But while I've always been familiar with Arianespace and their rockets, when I looked across the pond and dove into their shareholder structure, I realized I had no idea who actually owned them! Unfortunately Ariancespace's ownership is more complicated, but that's not surprising given they serve the European Space Agency, so the various member states all want to contribute a piece. Here's my best attempt at laying it out below!

Arianespace is primarily a subsidiary of ArianeGroup, which itself is a 50/50 joint venture between two European aerospace giants: Airbus and Safran. ArianeGroup also manufactures ballistic missiles for the French Navy and smaller propulsion systems for orbital spacecraft, but it's their 74% stake in Arianespace that makes them the primary contributor to the Ariane rocket family. The remaining 26% comes from various companies across 9 European nations, but what's interesting is these aren't just random aerospace companies, they're actually the primary suppliers to Arianespace! I imagine the idea behind that structure is to align the interests of various players in the supply chain and keep costs to a minimum. Pretty neat huh? Everything looks nice in a PowerPoint diagram :)

No comments