BRITISH AEROSPACE and LagadSre claim that their Matra BAe Dynamics joint venture is positioned to become the focus for a single European integrated missiles business.
"This merger will set the tone and direction for the way that the missiles business develops in Europe," says John Weston, chairman of BAe Defence, adding that the eventual aim must be to see the bulk of Europe's missiles merged into a single grouping.
He argues that, even with sales of $1 billion, the Matra BAe venture needs to grow further to keep pace with the scale of the emerging US giants.
Further consolidation is already in prospect, if Matra's parent LagadSre can pull off its bid to take control of Thomson-CSF after its pending privatisation. No%l Forgeard, head of Matra Defense and managing director of LagadSre, says that a decision from the French Government is expected in mid-October, although no official timetable has been confirmed.
Foregeard says, that its missiles agreement with BAe already provides for the Thomson business to be brought into the venture. If either partner acquires a new missiles interest, that will become part of the 50:50 venture, with the other making up the difference in cash.
BAe has already had to pay £80 million ($120 million) in cash to offset the difference in valuation between its missiles business and Matra Defense. The sum could rise or fall by £30 million depending on how business develops over the next five years.
The joint venture also hopes to involve Germany in missiles projects, which could provide a crucial link to Daimler-Benz Aerospace (DASA). While the German initiative is not directly linked to a business merger, Weston says that they are taking place against the backdrop of a push for consolidation.
Such moves raise more questions over DASA's delayed missiles tie-up with Aerospatiale, although the French group says that it is still committed to the alliance.
Source: Flight International