European satellite groups orbit around Thales

3rd April 2006, Comments 0 comments

PARIS, April 3, 2006 (AFP) - French defence electronics group Thales seems about to become the central star in a European satellite conglomerate allying EADS and Alcatel in a booster stage of the Alcatel-Lucent alliance on Sunday.

PARIS, April 3, 2006 (AFP) - French defence electronics group Thales seems about to become the central star in a European satellite conglomerate allying EADS and Alcatel in a booster stage of the Alcatel-Lucent alliance on Sunday.

The plan has the support in principle of the French and German governments, and if the parts can be slotted together, this new satellite venture would create a European business able to compete with US groups Loral Space, Boeing and Lockheed Martin.

Those enterprises account for about 45 percent of the global market for commercial satellites, worth US $10 billion dollars in 2004.

The launch could be set in motion on Tuesday afternoon when the board of Thales meets to study a tie-up with Alcatel, also leaving room on the panel for the largely French-German group EADS, the European Aeronautic Defence and Space company.

Another possible participant is Italian group Finmeccanica, which is already a partner in Alcatel's space division.

The French government wants to ensure that big space and satellite interests held by Alcatel remain in French and European hands.

However, Thales and EADS declined to commment on Monday on the way the board meeting might go on Tuesday.

The talks between Alcatel and Lucent of the US, ending on Sunday in an agreement for Alcatel to absorb Lucent, accelerated negotiations on the consolidation of European satellite interests.

Under the terms of agreement on Sunday, Lucent's strategic US defence interests are to remain in US hands.

Alcatel will end up the dominant partner in the alliance with an interest of about 60 percent.

These terms in turn facilitate a key part of the next step under which Alcatel would contribute its satellite business to Thales and in exchange increase its holding in Thales from 9.5 percent now to about 25 percent. This would make it the second shareholder in Thales after the French government which has 31.3 percent.

At the moment the other shareholders in Thales are Dassault 5.7 percent, private investors via the stock market 47.1 percent, staff 4.6 percent and the company itself 1.8 percent.

EADS wants to offer its satellite business Astrium to Thales in exchange for 15.0-20.0 percent of Thales.

This would have more implications for French and German influence. A French state holding company owns about 30 percent of EADS, German auto group DaimlerChrysler owns about 30 percent, the Spanish government five percent and miscellaneous shareholders the rest.

The French joint chief executive of EADS, which generates most of its business through building Airbus aircraft mainly for civil but also for military use, has described the possible new arrangement "the Airbus of satellites".

Alcatel's satellite business is called Alcatel Alenia Space, of which Alcatel owns 67.0 percent and Finmeccanica 33.0 percent.

If EADS were to participate, its space business Astrium would be valued about equally with Alcatel Alenia Space.

One source close to these complex negotiations, who declined to be named, said that should EADS be left out of an alliance, EADS would withdraw and would not make any new proposal.

But this outcome was widely thought to be less likely than a three-way deal, perhaps in stages, because French President Jacques Chirac and German Chancellor Angela Merkel favour an arrangement linking Alcatel-Thales-EADS.

Germany made clear in June that it would insist on balanced representation of the 30-percent German interest in EADS. Chirac has obstructed any idea of a link between Alcatel and Thales alone and even talk of such a deal that did not include the eventual involvement of EADS in any case.

All three European companies are already partners in the consortium that in January signed a contract on the first phase of the European satellite navigation system Galileo.

Astrium benefits from other space activities owned by EADS: its satellite rocket launcher Ariane-5. And Alcatel, best known for its telecommunications networks, is the biggest maker of military and civilian satellites in Europe and the third biggest in the world.

Copyright AFP

Subject: French news

 

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