Alcatel in space unit deal

May 16, 2001
Web posted at: 1314 GMT

LONDON (CNN) -- French telecoms equipment maker Alcatel will acquire the 49 percent of Alcatel Space it does not already own from defence company Thales.

Alcatel (CGEP) said it will pay 795 million ($700 million) for the stake,  half in cash and half in Thales shares. This will reduce Alcatel's stake in Thales from 25.3 percent to about 20 percent, a statement said.

The purchase enables Alcatel, which has managed Alcatel Space since its creation in 1998, to strengthen its interest in satellite systems associated with terrestrial telecoms networks, it said.

Thales, formerly known as Thomson CSF, was renamed after Thomson  acquired UK defence company Racal.

The deal will enable Thales to focus purely on aerospace and defence. The company said it will use the 397.5 million cash portion of the transaction to strengthen its financial structure.

Alcatel Space last year generated revenues of 1.3 billion. It was created from the satellite businesses of Aerospatiale, Alcatel and Thales.

  Alcatel (PCGE) shares fell 7 percent to 34.54 after the deal was announced, making it the biggest decliner on the Paris main index. Thales (PHO) shares rose 1.5 percent to 46.30, the biggest gainer.

  The transaction will require the approval of the European Commission's antitrust authorities.

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Alcatel
Thales

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