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Alcatel Buys Out Thales In Space JVC (May 17)



PARIS---Following meetings of the Boards of Directors of Alcatel and Thales, an agreement has been reached between the two groups, under which Alcatel will acquire the 48.83% stake in Alcatel Space currently held by Thales, bringing its participation up to 100%.

The price of the transaction will amount to 795 million euros, to be paid half in cash and half in Thales shares. This will reduce Alcatel's stake in Thales from 25.3% to approximately 20%.

The operation, which will be referred to the European Commission for approval, will not affect the relations between shareholders as outlined in the Thales shareholders' agreement. The resulting balance among shareholdings remains satisfactory.

The agreement enables Alcatel, which has managed Alcatel Space since its creation, to strengthen its interests in this strategic sector. Alcatel considers satellite systems associated with terrestrial telecommunications networks as a key component in the information transmission chain.

The agreement enables Thales to continue to refocus on its three core businesses (Aerospace, Defence and Information Technology & Services), in which the Group completed a number of major acquisitions in 2000. Thales will use the cash received (397.5 million euros) and the shares previously held by Alcatel to strengthen its financial structure.

The timing and details of any operations involving these shares will depend on market conditions, and may include instruments covered by resolutions submitted to Thales shareholders for approval at the AGM on 16 May 2001.

Thales and Alcatel will pursue their industrial cooperation within the framework of the agreements of 18 November 1999.

In 2000, Alcatel Space generated revenues of 1.3 billion euros. Established in 1998 when the satellite businesses of Aerospatiale, Alcatel and Thales merged, the company is one of the world leaders in satellite and space systems.

Alcatel builds next generation networks, delivering integrated end-to-end voice and data networking solutions to established and new carriers, as well as enterprises and consumers worldwide. With 130,000 employees and sales of EURO 31 billion in 2000, Alcatel operates in more than 130 countries.

Thales is one of Europe's largest professional electronics groups and a world leader in three areas: Aerospace, Defence, and Information Technology & Services. In 2000, Thales generated revenues of 8.6 billion euros, 74% outside France. Following its acquisition of the UK group Racal, Thales now has close to 65,000 employees worldwide, half of them outside France.

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Alcatel To Acquire Thales' Stake In Alcatel Space