Defence giant is eyed up

Alcatel Alsthom is in talks with Aerospatiale and Dassault Aviation about mounting a joint bid for the French state-owned defence giant Thomson-CSF – part-owner of British defence firms including Pilkington Optronics and Shorts Missile Systems. French reports claim that Alcatel and the future merged Aerospatiale-Dassault company would offer to buy the 58% stake in Thomson-CSF […]

Alcatel Alsthom is in talks with Aerospatiale and Dassault Aviation about mounting a joint bid for the French state-owned defence giant Thomson-CSF – part-owner of British defence firms including Pilkington Optronics and Shorts Missile Systems.

French reports claim that Alcatel and the future merged Aerospatiale-Dassault company would offer to buy the 58% stake in Thomson-CSF held by the French government and worth around £1.5bn.

The Lagardere group, which owns Matra Defense, has already expressed an interest in chasing Thomson-CSF. French prime minister Alain Juppe said on Monday his government would decide this month on how Thomson-CSF will be privatised.

This follows last year’s sale suspension after the French privatisation commission criticised the plan to sell the Thomson Multimedia consumer electronics arm to Daewoo, of South Korea.

Alcatel and Lagardere put in bids for Thomson-CSF last time round, Lagardere being chosen before the sale was halted.

The French government has so far said only that the sale will be completed on the basis of a flotation.

A sale to the Lagardere group would put Matra in charge of Shorts Missile Systems, one of Matra’s most serious rivals in the market for very short range air defence missiles. This would also bring British Aerospace into such a missiles tie-up, as part-owner of Matra BAe Dynamics.