GEC is expected to announce a joint venture with Italian aerospace and defence company Alenia this week. A spokesman for GEC said the company understood an announcement was due soon.
The joint venture is expected to be along the lines of GEC Alsthom, which consists of a straightforward 50:50 split.
This tallies with plans outlined last July by GEC for it and Alenia to have a 50:50 share in a £1bn turnover missiles, naval and defence electronics business.
The rest of the Alenia and GEC defence businesses are expected to have more complex linkages.
According to the outline plan, GEC would take a 25 49% stake in the Alenia Difesa avionics business, which would be fused with GEC-Marconi Avionics to form a joint venture with a £700m turnover.
This would leave Alenia Difesa to take a similar stake in GEC-Marconi’s VSEL guns and armoured vehicles business. With a turnover of £250-280m, this venture looks set to be Alenia-led.
Early this week it was not clear if these arrangements for the avionics and VSEL businesses would still apply.
* GEC meanwhile played down reports that it was in merger talks with British Aerospace, describing them as ‘misleading’.
BAe, however, could take a stake in Swedish firm Saab as part of the restructuring of the European aerospace industry. BAe said that the idea of a stake in Saab was speculative, but admitted that ‘clearly Saab may well form part of the whole process in future’.
News Analysis, page14