Julian Moxon/PARIS Andrzej Jeziorski/MUNICH
As France paraded its latest piece of aerospace restructuring with the tie-up between Aerospatiale and Lagardère, the pressure was being kept up with timely media reports of merger talks between British Aerospace and Daimler-Benz Aerospace.
Publicly, BAe and Dasa both welcomed the "encouraging" news from France, which will edge state-owned Aerospatiale closer to privatisation. Privately, both companies were reserving their judgements until the details of the latest French move and its timetable become clear.
Aerospatiale's continuing control by the French Government has been seen as the major barrier to the long-term goal of creating a single European aerospace/ defence business. It remains uncertain whether the latest move is sufficient to overcome German and UK concerns.
The broad terms of the deal, sealed by Aerospatiale chairman Yves Michot and Lagardère co-director Phillippe Camus, will see Lagardère acquiring 30-33% of Aerospatiale and in return the company will place its Matra aerospace and systems businesses into the new group.
A further tranche of Aerospatiale shares will go to staff, with a public share flotation also being promised to leave the French Government's holding in the company below 50%.
Matra will bring its existing alliances with BAe and Dasa in missiles (through Matra BAe Dynamics) and with GEC and Dasa in space (through Matra Marconi Space) into the new group. None of its European partners was involved in the negotiations.
Despite the lack of pre-agreement discussion, the decision was broadly welcomed. A BAe source says: "We do not see a problem with it. Lagardère knows where we stand on European consolidation." He adds, however, that transfer of the joint ventures to the new group "will still require negotiation".
Dasa president Manfred Bischoff praised the French move as an important step towards restructuring, but pointed out that it left the French Government as the biggest single shareholder "by far" and further steps were needed by France to secure agreement.
This mood was reinforced a few days later when the Financial Times reported that talks were now under way to merge the military aircraft businesses of BAe and Dasa, underlining the position that if France does not move decisively towards privatisation, the country could be left behind.
The French Government retains a "golden share" in Aerospatiale, although with the likely eventual inclusion of other partners, such as Dassault Aviation, into the group, the state's stake could ultimately be reduced to well below the 47% level remaining after the details of the current agreement are settled.
Uncertainty still surrounds the consolidation of Europe's missiles and space businesses into single entities. Michot says that "one of the industrial priorities is now to pursue European integration" in these sectors, but he makes it clear that the Aerospatiale-Matra operation has been carried out "not just to bring together the two major shareholders in the new group, but to place them at the heart of the European restructuring effort".
French defence minister Alain Richard adds that while the two French groupings, one based around defence electronics, the other around aeronautics and space, should "remain independent" of each other, the "recognised competences of Thomson- CSF in missile systems and of Aerospatiale and Matra as missile manufacturers" should be taken into account.
Thomson-CSF has also been reorganised recently, with a partial privatisation.
The Lagardère group has set January 1999 as the deadline for finalising the details of the proposed merger.
Source: Flight International