Chris Jasper/LONDON
French defence electronics specialist Thomson-CSF has taken full control of Northern Ireland-based Shorts Missile Systems (SMS), previously a joint venture with Canada's Bombardier. Thomson confirms that it has also bid for another UK player, Racal Electronics.
Thomson-CSF has bought Bombardier's 50% stake in SMS, and becomes the sole shareholder from 31 January. The terms of the deal - including the purchase price - have not been disclosed.
Thomson-CSF is now the second biggest defence equipment supplier within the UK - a position that would be bolstered by the purchase of Racal. The French company confirms that it "made an approach in November". Flight International revealed Thomson's interest in Racal earlier in the year (1-7 September, 1999).
Thomson-CSF's takeover of SMS seems a logical step. The business was formed in 1993 as a joint venture with Bombardier's Short Brothers and employs 500 people in Belfast and 50 at its French-based subsidiary, Thomson Shorts Systèmes.
SMS shares will be held by Thomson-UK Holdings, allowing it to remain a UK-registered company. Its flagship products are the Starstreak and Starburst very short-range missile systems, plus command and control and other defence systems.
SMS recently won a £200 million ($325 million) order for the Starstreak from the UK Ministry of Defence and is partnered with Raytheon of the USA in its bid to supply the next generation of air-to-air missiles. It also collaborates in the NLAW, TRACER and UK attack helicopter missile programmes and recently delivered Hellfire missiles for the latter - the first time that the US missiles have been manufactured outside the USA.
Thomson-CSF's interest in Racal is dependent on the UK company's valuation. A rise in its share price in December meant that "no satisfactory conclusion" was reached. It adds, however, that it "would like to conclude an agreed transaction".
Source: Flight International