Thales has applied for Australian government approval to take over ADI, one of Australia's top five defence contractors. ADI is jointly owned by Thales Pacific and Australia-based Transfield Holdings. Australia's Foreign Investment Review Board should rule on the take-over within the next 90 days.
Thales loaned Transfield an estimated A$173 million ($90 million) - half the total purchase price - in 1999 to buy its share of ADI from the Australian government. Late last year Transfield revealed that it was unable to service the loan.
Thales has been discussing the take-over with government officials since early December. Thales chairman Denis Ranque visited Canberra last month for talks with defence minister Robert Hill and finance minister Nick Minchim.
The take-over plan is expected to re-invigorate debate in Australia about foreign control of its domestic defence industry - it would leave Tenix as the only major defence firm still owned and controlled by Australians.
ADI has addressed these concerns by advising the government that all classified projects being carried out by the company would be placed into an "Australian eyes only" facility.
Thales also plans to retain ADI's existing management arrangements, but would combine Thales and ADI operations in Australia into a single entity. As well as ADI, the French company's operations in Australia also include Thales Underwater Systems.
An internal ADI memo obtained by Flight International says: "It is clear that ADI's growth prospects will be further enhanced by having an owner that is focused on the same technologies and same business segments."
Source: Flight International