FRANKFURT (Reuters) - Germany's Daimler (>> Daimler AG) sold its remaining stake in EADS (>> EADS) for about 2.2 billion euros ($2.9 billion), exiting its aerospace activities completely nearly 13 years after it helped to found the Airbus parent company.

Daimler said it placed 61.1 million shares at 37 euros each, the top end of the range, amid strong demand from international investors.

EADS itself purchased 600 million euros of its own stock as part of the placement.

"The proceeds from this sale are contributing positively to our free cashflow this year and, in addition to the earnings from our ongoing businesses, will also support our policy of stable dividends," finance chief Bodo Uebber said in a statement.

Analysts welcomed the move because it helped to remove uncertainty over how Daimler would fund a payout for this year. The proceeds from the EADS stake sale nearly cover the 2.20 euros per share distributed after this month's annual general meeting, which equates to roughly 2.3 billion euros.

"The transaction should support the attractive dividend yield of Daimler shares, which is the main reason for our hold recommendation," DZ Bank analyst Michael Punzet wrote in a research note to clients.

UBS increased its dividend estimate to 2.10 euros from a previous 1.75 euros per share.

EADS shares were up 4.4 percent at 3:31 a.m. ET.

Daimler said it could even participate in a certain upside potential in EADS shares despite Wednesday's disposal, after entering into cash-settled derivative contracts with both Goldman Sachs and Morgan Stanley.

Daimler on Tuesday received a waiver from a six-month lock-up period and began immediately placing its remaining 7.5 percent stake in Toulouse-based EADS.

Daimler's move follows on the heels of fellow founding shareholder Lagardere's (>> LAGARDERE SCA) exit from EADS last week, paving the way for the aerospace group to have a larger free-market float.

EADS was formed in 2000 from the merger of several European aerospace companies, including Daimler's DASA.

The German carmaker received a 30 percent stake after EADS' creation. Daimler has whittled down the stake over time, most recently selling 7.5 percent in early December.

(Reporting by Christian Hetzner and Edward Taylor; Editing by Victoria Bryan and David Goodman)

Stocks treated in this article : Daimler AG, EADS, LAGARDERE SCA