AGENCE FRANCE-PRESSE,
Paris: French defence electronics group Thales and state-owned naval shipyards DCN linked up on Thursday in a significant step towards consolidation of European naval defence industries.
The agreement between the companies, creating an entity which will be one of the three biggest shipbuilders in Europe, has the strong support of French Defence Minister Michele Alliot-Marie.
DCN, which is 100-percent state owned, is both a manufacturer of warships and submarines and a supplier of defence computer systems and advanced technology.
The company, which employs 12,100 people, counts the French navy as its main customer, but also supplies more than 40 navies across the world.
Alliot-Marie told a press conference: “We have to end up by bringing together the whole of the European (naval defence) industry.
“I don't think that we are going to start with an agreement with the Germans,” she said. “The discussions are more advanced with the Spanish and the Portuguese.”
The chief executive of DCN, Jean-Marie Poimboeuf, said: “This is a vital preliminary step on the way to the European phase in five years' time.”
The transaction fits a pattern of attempts by the French government to re-organise military construction in France and in Europe.
In 2000, France played an important role in the consolidation of European missile, helicopter and aircraft-making companies into the European Aerospace Defence and Space Company, or EADS.
DCN, or Direction des Constructions Navales, expects to generate sales of 3.0 billion euros (3.6 billion dollars) this year compared with 2.6 billion euros last year and says it has an order book worth “in excess of 8.0 billion euros”.
Thales, formerly known as Thomson-CSF, is a supplier of electronics to the defence and security sectors. It is quoted on the French stock exchange, but is 31.3-percent owned by the French state.
The price of shares in Thales showed a gain of 0.77 percent to 38.17 euros in a broadly flat market.
DCN and Thales signed a shareholding alliance under which Thales agreed to transfer to DCN its naval shipyard activities and its half of a joint venture between the two companies.
In return, Thales is to take a 25.0-percent stake in DCN and make a cash payment of 100.0-150.0 million euros to the French state.
The transaction is expected to be completed in June next year and Economy and Finance Minister Thierry Breton said that Thales might thereafter increase its stake in DCN to 30.0-35.0 percent.
Workers at DCN protested against the perceived privatisation of the company on Thursday, Thales is quoted on the Paris stock exchange, and trades unions threatened strike action.
Several hundred employees of DCN demonstrated against the link up in the French town of Brest, where DCN manufactures big warships.
