French government suspends Thomson sale

The French privatisation programme was thrown into utter chaos yesterday after the Chirac government suspended the controversial sale of the defence and electronics giant Thomson to a consortium including British Aerospace.

The move was prompted by a wave of public protests that had greeted plans to sell Thomson's consumer electronics business, Thomson Multimedia (TMM), to a Korean conglomerate.

Lagardere, which was chosen as the preferred bidder for Thomson in October, had planned to dispose of TMM to Daewoo Electronics. That would have left it to share Thomson's defence business with BAe, which was prepared to provide financial support for the Lagardere bid and has already merged its missiles business with Matra, a Lagardere subsidiary.

But the move to offload TMM to Daewoo prompted mass anger. Several thousand TMM workers marched last month protesting against the sale to a booming Asian competitor, fearful for their jobs and working conditions.

In a shock announcement yesterday, the French Finance Ministry said its Privatisation Commission "declared itself incapable of giving a favourable opinion to the Lagardere offer, because of the terms of Daewoo Electronics' purchase of Thomson Multimedia".

The move left industrialists, bankers and political observers stupefied, particularly as the French prime minister, Alain Juppe, had defended its choice of buyer for several weeks.

The suspension of the sale comes just days after Mr Juppe's right-wing government gave in to the demands of striking lorry drivers and less than a month after the privatisation of the French bank, CIC was also put off.

The official explanation given at the time was that the bids had not been high enough. But the real reason is thought to have been that there was no acceptable offer by a French bidder, meaning that CIC might have had to be split up and auctioned off to foreign buyers.

The French industry minister, Franck Borotra, said the privatisation of Thomson remained essential for the company. But the decision to suspend the process means that Alcatel, which had been tipped as the most likely winner, may now re-enter the fray.

Alcatel, which had pledged to keep Thomson intact, said it "took note" of the decision. Lagardere said it remained interested in taking over the company. If its bid succeeds, Thomson's missiles and dynamics business, which has sales of pounds 300m-pounds 400m, will be incorporated into the pounds 1bn joint venture formed by Matra and BAe.

Meanwhile there was better news for BAe in the shape of confirmation that it is part of a consortium which has bought the German defence systems company STN Atlas Electronik. BAe is paying pounds 104m for a 49 per cent stake in the business, which will give it access to the German naval market.

The deal will come as a small consolation after BAe lost out to GEC in the battle to take over VSEL, which would have given it a naval systems integration capacity.

"This allows us to extend and enhance our expertise and builds on our systems integration expertise and customer base," said a spokesman. The other members of the consortium are the German groups Rheimetall and Badenwerk.

Start your day with The Independent, sign up for daily news emails
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Admin Assistant

£12000 - £15000 per annum: Recruitment Genius: An expanding Insurance Brokerag...

Ashdown Group: Editor-in-chief - Financial Services - City, London

£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

Guru Careers: Pricing Analyst

£30 - 35k (DOE): Guru Careers: We are seeking a Pricing Analyst with experienc...

Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Day In a Page

Revealed: Why Mohammed Emwazi chose the 'safe option' of fighting for Isis, rather than following his friends to al-Shabaab in Somalia

Why Mohammed Emwazi chose Isis

His friends were betrayed and killed by al-Shabaab
'The solution can never be to impassively watch on while desperate people drown'
An open letter to David Cameron: Building fortress Europe has had deadly results

Open letter to David Cameron

Building the walls of fortress Europe has had deadly results
Tory candidates' tweets not as 'spontaneous' as they seem - you don't say!

You don't say!

Tory candidates' election tweets not as 'spontaneous' as they appear
Mubi: Netflix for people who want to stop just watching trash

So what is Mubi?

Netflix for people who want to stop just watching trash all the time
The impossible job: how to follow Kevin Spacey?

The hardest job in theatre?

How to follow Kevin Spacey
Armenian genocide: To continue to deny the truth of this mass human cruelty is close to a criminal lie

Armenian genocide and the 'good Turks'

To continue to deny the truth of this mass human cruelty is close to a criminal lie
Lou Reed: The truth about the singer's upbringing beyond the biographers' and memoirists' myths

'Lou needed care, but what he got was ECT'

The truth about the singer's upbringing beyond
Migrant boat disaster: This human tragedy has been brewing for four years and EU states can't say they were not warned

This human tragedy has been brewing for years

EU states can't say they were not warned
Women's sportswear: From tackling a marathon to a jog in the park, the right kit can help

Women's sportswear

From tackling a marathon to a jog in the park, the right kit can help
Hillary Clinton's outfits will be as important as her policies in her presidential bid

Clinton's clothes

Like it or not, her outfits will be as important as her policies
NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders