Julian Moxon/PARIS

FRANCE AND Germany have agreed to co-operate on the development of military-observation satellites, unblocking the path for a wide-ranging alliance covering satellites and missiles between Daimler-Benz Aero-space (DASA) and Aerospatiale.

The deal, signed at the Franco-German summit between German Chancellor Helmut Kohl and French President Jacques Chirac in Baden-Baden on 7 December, could prove the key to the post-Cold War restructuring of the European aerospace industry. DASA and Aerospatiale are already linked through their Eurocopter helicopter alliance, and via many joint international programmes.

Under the accord, DASA will take a 20% stake in the French-led, Fr11 billion ($2.26 billion) Helios 2 infrared observation-satellite programme. Germany also agreed, to joint development of the Fr13 billion Horus radar-observation satellite, but only if it took the lead and if the door was left open for US participation. Italy and Spain will be partners in both projects.

The accord has been awaited for more than a year, delays occurring because of Germany's unwillingness to come up with funding worth more than its 10-15% industrial stake in the Helios 2. Germany was also reluctant to turn its back on the USA, with which it has a long-standing agreement on access to US military-satellite data.

Aerospatiale and DASA will now finalise the mergers of their respective satellite businesses. This will see the creation of a joint, equally owned, subsidiary, based in Munich, charged with overseeing the military- and civil-satellite activities of both companies. The deal should be finalised in around a year, after due diligence investigations and European Commission approval.

The two have already concluded their industrial accord on merging their missiles businesses and, while the satellites deal apparently opens the way for the agreement to become official, there are potential stumbling blocks. The French Government is undertaking a fundamental review of its defence requirements and is due to report in 1996 on how the defence industry should be restructured. The question of Matra is also open: it has failed to conclude its own missiles deal with British Aerospace, and its space activities, jointly owned with GEC, have been left in the cold by the new moves.

Source: Flight International