Thomson-CSF bid decision hinges on national security

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The Independent Online
The French finance minister, Jean Arthuis, said yesterday that "national security" would be one of the factors which shaped his government's decision on the sale of its majority share in the military elec- tronics company Thomson-CSF.

But Mr Arthuis refused to comment on reports that the British electronics giant GEC had tabled a preliminary bid for the company, part of the French state-owned electronics conglomerate Thomson SA.

The French government has let it be known that it sees the fate of Thomson as part of a broader restructuring of the country's military-industrial complex.

Mr Arthuis said yesterday that the government's decision on the final bids, to be made by 7 May, would be shaped by the "credibility of the candidates ... their capacity to carry through their plans" and "factors related to national security".

The minister said Paris would declare which bidders had been admitted to the second, detailed stage of the auction by Monday at the latest.

A senior executive of one of the two French defence groups known to be in the bidding confirmed, however, that GEC had also thrown its hat into the ring.

Noel Forgeard, president and chief executive of Matra High Technologies, part of the Lagardere group, said that GEC had given advance warning of its bid.

He said Lagardere did not regard this as an unfriendly act by GEC, with which it shares the ownership of the Matra Marconi defence and satellite electronics company.

His comments furthered speculation that the GEC move was no more than a tactical ploy, and was mostly intended to place a marker for the British company's continued interest in alliances and joint ventures with the French industry.

British Aerospace, GEC's great rival, has indicated its support for the Thomson bid by Lagardere, with which it also has a joint venture.

The other French bidder is the space and telecoms company Alcatel Alsthom, in conjunction with the plane-maker Dassault.

But Lagardere was the chosen saviour for Thomson-CSF in the French government's first attempt to privatise the entire Thomson group, which was rejected by the official privatisation watchdog in December.

The French government owns 58.2 per cent of the shares of Thomson-CSF, a stake valued at pounds 1.3bn.