Gilbert Sedbon/PARIS

DASSAULT AVIATION IS considering taking a stake in Thomson-CSF, the French defence-electronics giant, which is due to be privatised in 1996, but the company has ruled out an alliance with Aerospatiale.

"I've no interest in buying into Aerospatiale," says chairman Serge Dassault, claiming that there is too much duplication between the two groups. He adds that Thomson-CSF could provide a more "meaningful" partner, especially in radar and countermeasures.

Dassault already has strong links with Thomson-CSF, through its Dassault Electronique arm, on a range of defence projects, including the Rafale combat aircraft. Combining the two groups would provide sufficient scale to compete with the emerging US giants, according to Dassault.

The Dassault chairman signals that his company will continue to fight any Government pressure for an alliance with its state-owned rival, Aerospatiale, which is also on the privatisation list.

Aerospatiale chairman Louis Gallois is still seeking a partner to help with the group's badly needed recapitalisation. He has also made repeated calls for an injection of Fr10 billion ($2 billion) from the state shareholder, but the French Government has refused to commit to any fresh funding until the group has submitted a convincing recovery plan.

Other French companies are already eyeing up parts of Aerospatiale, should the group be forced to make disposals, with Matra-Marconi Space, for example, keen to buy up the company's satellite division.

Inter-technique is unlikely to do better than break even this year, says chairman Edmond Marchegay, admitting that earlier predictions of a Fr15 million profit have been hit by the weakness of the US dollar. The revised forecast came as the French equipment group posted a Fr43.5 million loss for the first half of 1995.

Warning about the need to drive down costs, Marchegay says, that French engineers would have to make an "impossible" 30% gain in productivity to be competitive with US counterparts. He adds that US rates are only two-thirds of those in France or Germany, with the UK better still at 55%.

Source: Flight International