French industrial group Alcatel Alsthom has confirmed that it has held talks with Aerospatiale and Dassault on forming a bidding team to make an offer for defence-electronics giant Thomson-CSF.
The move comes as the French Government prepares to reveal how it wants to secure the company's privatisation, with prime minister Alain Juppé promising a decision "before the end of February".
The Government may still decide to find an industrial partner to take control of the business, in a replay of the bidding of 1996, when Lagardère-Matra emerged as the winner, but later had its offer thrown out by the French privatisation committee.
The second option now under consideration is to float the state holding in Thomson-CSF, which already has 42% of its shares publicly traded.
Lagardère is expected to renew its bid if the first option is chosen, and, according to one source, may form its own alliance to counter the Alcatel strategy. The UK's GEC, which has strong links to Matra through Matra-Marconi Space and to Alcatel through the GEC-Alsthom power engineering venture, has been linked by sources as a likely partner to Lagardère.
British Aerospace, which sealed its missiles merger with Matra in 1996, has also pledged to support the Lagardère bid.
Despite losing in the original contest, Alcatel's alliance strategy has gained supporters in France. The bid would bring in the missiles and satellite activities of Aerospatiale, Dassault Electronique and the radio and defence division of Alcatel, forming a group which is now valued at more that Fr10 billion ($2 billion).
How much of a stake in Thomson-CSF the three would be able to take depends on how the Government structures its decision. One scenario is that they might purchase the entire 58% state-held shareholding, creating at a stroke a horizontally integrated group along the lines of the Lockheed-Martin alliance. Supporters argue that the result would produce leading European businesses in missiles, defence, electronics and space around which to base the region's consolidation.
French industry sources expect that Daimler-Benz Aerospace would also be invited to negotiate to join the new group, if it wins. The German group has had long-standing negotiations with Aerospatiale over joint ventures on missiles and satellites, but put plans on hold awaiting the outcome of the French restructuring.
Thomson-CSF is expected to record orders for 1996 at around the same level as for 1995, at Fr33.2 billion, largely because of the Fr9.9 billion Sawari 2 deal with Saudi Arabia for defence-electronics equipment to be supplied over the next ten years.
The manufacturer is due to release its final figures in late February or early March.
Source: Flight International