Gilbert Sedbon/PARIS
FRENCH GOVERNMENT plans to merge state-owned Aerospatiale with privately owned Dassault Aviation appear to have run into difficulty just two weeks after the proposal was unveiled.
Dassault, the fiercely independent combat-aircraft and corporate-jet manufacturer led by chairman Serge Dassault, is refusing to be bounced into a merger involving it in paying for part of the heavy restructuring costs required at Aerospatiale while eventually denying them control of the resulting joint venture.
Although Dassault is declining to comment officially, senior executives are not denying widespread reports that the company has put stringent conditions to the Government on merger terms.
Among the demands are said to be the removal of Aerospatiale boss Louis Gallois; the slimming down of the workforce by some 10,000 from the 40,000 people it now employs and the valuation of Aerospatiale at Fr5 billion ($986.1 million) and Dassault at Fr13 billion in any merger.
Gallois' response has been to say, that the merger will occur "one way or the other". He believes that the 30 June deadline set by President Jacques Chirac for the Government-created steering committee to report guidelines on how the tie-up can be achieved is "tight but achievable". The Government says that it wants the deal completed within two years.
Previous Government attempts to arrange a shotgun marriage between the country's two largest airframe builders have failed and Serge Dassault, who controls 49.9% of his company's shares against a 45% Government holding seems determined to conduct the deal on his terms - particularly now the Ministry of Defence has made a Fr35 billion commitment to his Rafale fighter programme in the 1997-2002 military programme draft law.
While Dassault fights its corner with the French Government, Matra Defense-Espace, the other large privately owned French defence company, has started manoeuvring to bolster its position in the wake of the Chirac proposals to undertake sweeping changes in aerospace - which includes the privatisation of Thomson.
Noel Forgeard, Matra's chairman and chief executive and one-time economic counsellor to Chirac, has his eyes on acquiring the defence-electronics activities of Thomson-CSF and the satellite and missiles businesses of Aerospatiale now in the throes of being put into a joint venture with Daimler-Benz Aerospace.
Matra already has a 51% share of a Matra Marconi Space joint venture with GEC-Marconi and has been trying to seal a deal for the last three years with British Aerospace to merge their respective missile activities. See Business, P12.
Source: Flight International
