Franco-Italian Agree to Create Leading Underwater Weapon Systems

DCN, NICE, France: DCNS, Finmeccanica and Thales today announced their intention to merge their underwater weapon system activities. This cooperation will strengthen the European defence industry, creating a leading world player in this domain. 
 
To this end, at the Franco-Italian summit in Nice, the three partners have signed the Heads of Agreement (HoA), setting forth the creation of three joint-ventures: 
 
– the “Torpedo Program JV”, which will be in charge of the torpedo system engineering, design and development, marketing & sales and program management activities. It will be owned at 51% by Finmeccanica and 49% by DCNS. This JV will act as the overall Design Authority and Customer Interface for torpedoes (both heavy and light weight) and torpedo defence systems; 
 
– the “Torpedo Manufacturing JV”, which will be responsible for torpedo manufacturing and support activities, as well as energy module engineering, test and manufacturing. It will be owned at 51% by DCNS and 49% by Finmeccanica. 
 
– the “Sonar JV” which will include the acoustic head design, development, manufacturing and support activities, as well as the sonar business dedicated to the Italian customer. It will be owned at 51% Thales and 49% by Finmeccanica. 
 
These new organizations will create value for the benefit of all stakeholders, improving production efficiency, management integration, quality of products and services offered to final customers and increasing returns to shareholders. Furthermore, the project could bring significant synergies by further exploiting the roles and activities of the respective national centers of excellence, while ensuring primary priorities of maintaining employment stability and growth prospects..The Joint Ventures’ industrial sites would be maintained in the current locations. 
 
DCNS – through its Underwater Weapon Business Unit –, Finmeccanica – through its Whitehead Alenia Sistemi Subacquei S.p.A. subsidiary –, and Thales (through its Thales Underwater Systems S.A.S. subsidiary) have been working together for several years in the field of underwater weapons systems. Indeed, the three companies are successfully operating through the Eurotorp GEIE consortium for the lightweight torpedoes (MU90) development and marketing and through the Euroslat GEIE consortium in the field of anti-torpedo systems. 
 
This successful track record has contributed to the exploitation of the core competencies of the three partners, whose expertise is highly recognized by the respective national customers as well as on the international markets for both light and heavyweight torpedoes as well as for anti torpedoes systems. 
 
Based on these fundamentals, DCNS, Finmeccanica and Thales have decided to enter into this strategic alliance in order to create a global technological leader in the underwater weapon systems market. 
 
The three CEOs – Pier Francesco Guarguaglini for Finmeccanica, Jean-Marie Poimboeuf for DCNS and Denis Ranque for Thales – have stated that this agreement represents a new milestone in the consolidation of the European naval defence industry. 
 
In due time, they would consider opening the alliance to other European players. 
 
The closing of the project is expected to occur by 2008 following due diligence and regulatory approvals.  
 
The DCNS group is one of Europe’s leading players on the world market for naval defence systems. To meet customer demands for more comprehensive and integrated systems, DCNS acts as prime contractor for naval shipbuilding, integration and support by combining its own development, marketing and production capabilities with those of selected partners. The DCNS group employs some 13,300 people and generates annual revenues of around €3 billion. 
 
Finmeccanica is Italy’s leading high-tech company, operating in the design and manufacture of helicopters, defence electronics, civil and military aircraft, aerostructures, satellites, space infrastructures, missiles. It plays a leading role in the European aerospace and defence industry, and participates in some of the biggest international programmes in the sector through well-established alliances with European and American partners. Finmeccanica employs over 59,000 staff in total of which approximately 9,000 in UK, 3,500 in France and 1,600 in US. As part of its drive to maintain and build on its technological expertise, Finmeccanica spends 14% of its revenues on Research and Development. 
 
Thales is a leading international electronics and systems group, addressing defence, aerospace and security markets worldwide. Thales’s leading-edge technology is supported by 22 000 R&D engineers who offer a capability unmatched in Europe to develop and deploy field-proven mission-critical information systems. Thales employs 68 000 people in 50 countries with forecast 2007 revenues in excess of EUR 12 billion.