Kevin O'Toole/LONDON

BRITISH AEROSPACE, Daimler-Benz Aerospace (DASA) and GEC have all been named by Matra president Noel Forgeard as among those keen to join a bid for French electronics giant Thomson-CSF, when it is privatised later this year.

The comments follow the news that Matra and BAe have finally concluded their long-running negotiations over the merger of the missile units under the Matra BAe Dynamics banner.

Announcing the missiles deal, BAe went on to pledge support for Matra's parent, the Lagardere group, in its efforts to win control of Thomson-CSF.

Noel Forgeard, Matra president and Lagardere director, added at a press conference in Paris that GEC is ready to join a bid and that DASA has given "positive feedback". Dassault Electronique is named as another possible partner.

Although the French Government has decreed that the privatisation should take place before the end of this year, few details have emerged about the timescale or conditions attached to the sale.

"It's impossible to read at the moment," says one financial analyst, adding that none of Europe's major aerospace groups is keen to be excluded from what could prove the most decisive move yet in the region's slow-moving defence consolidation.

BAe and Matra have a clear interest in adding the Thomson missile business to their new alliance, while a merger with GEC would create a radar unit to rival the US giants. Thomson-CSF also holds a majority two-thirds stake in Sextant, which, if combined with one of the UK groups such as GEC or Smiths Industries, would emerge as the world's largest avionics company, with sales in the region of $2 billion.

It is far from certain, however, that the French Government will sanction a break-up of the group. It has already indicated that Thomson-CSF will be sold off as a package together with Thomson Multimedia, the group's heavily indebted multi-media arm - a decision which led to the stormy resignation of Thomson chairman Alain Gomez in February. He had favoured a straight alliance between the defence arm, which is already partially publicly owned, and GEC.

Lagardere has not disguised the fact that its main interest is in the defence business and it is understood to have signed a deal with South Korea's Daewoo to divest Thomson Multimedia if it comes as part of an overall package. Lagardere has asked Thomson to clarify what is to be sold.

Lagardere will also have to fight stiff competition from rival French electronics group Alcatel, which has ambitions to take over the whole of Thomson.

See News Analysis, P27.

Source: Flight International