Alcatel and Thales unveiled a long-awaited 1.6-billion-euro ($1.95-billion) satellites deal on Wednesday, more than doubling Alcatel's stake in Thales and setting the stage for further consolidation of Europe's aerospace and defence industry.
The deal, whereby Alcatel is to sell businesses with 2 billion euros of revenues for 673 million euros in cash and 26.67 million shares in Thales, also leaves Alcatel to focus on the expansion of its telecommunications business with the planned take-over of Lucent Technologies.
In return for its satellite and other assorted non-core businesses, Alcatel gets to boost its stake in Thales to 21.6 percent from 9.5 percent. The French state will remain the largest shareholder in Thales with a stake of 27.1 percent.
"The move with Alcatel is a truly industrial project which is entirely coherent with Thales's strategy," Thales Chairman and Chief Executive Denis Ranque said in a statement.
"It strengthens the group and positions it at the heart of future consolidation operations within the European critical systems for defence and security industry," Ranque said.
"The group is in an excellent position to pursue discussions with its European partners," he added.
The predominantly Franco-German aerospace and defence company EADS, which owns Airbus and has also been campaigning to be allowed to swap its own satellite unit for a stake in Thales, said the Alcatel deal made no difference to its own business.
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