Dassault Aviation picks up Alcatel-Lucent's Thales Stake

19 December 2008

Dassault Aviation SA has agreed to acquire Alcatel-Lucent SA's 20.78 per cent stake in Thales SA for about €1.57 billion ($2.24 billion) that will hike its influence at a major supplier of flight electronics for its aircraft.

Dassault Aviation makes the Rafale fighter and the Falcon corporate jet. It plans to pay €38 per share, according to a company statement. The aviation company already has around 5.2 per cent of Thales, and with the addition of this additional stake would hold only a little lesser than the 27.1 per cent held by the French state.

Between France and Dassault Aviation, they would control around 61 per cent of voting rights at Thales. It will also allow Dassault to dictate at least some terms at decisions at the important supplier, while helping the French government consolidate a key military asset.

In a statement, France's finance ministry said that strengthening the partnership between Thales and Dassault Aviation "allows for the creation of a world-class French centre of excellence in strategic technologies, aerospace, defence and security". It said that the move is simlar to the actions of the United Kingdom, Italy and Sweden, and builds around "core companies."

Dassault has been fighting an uphill battle for winning export orders for the Rafale fighter jet, having lost competitions for contracts to US rivals.

The French government has so far placed ordered 120 Rafales till date, and has promised to buy 294 in all. It is also in talks with Libya and the United Arab Emirates (UAE) amongst other nations for export orders.