Dassault Aviation bids $2 billion for Alcatel-Lucent's stake in defence contractor Thales

18 November 2008

Dassault Aviation, maker of the Falcon corporate jet, offered €1.56 billion ($2 billion) for Alcatel-Lucent SA's 20.8 per cent stake in Thales SA, to expand its holding in Europe's largest defence-electronics manufacturer.

The companies started exclusive talks on the €38-a- share proposal that will continue until 15 December, Alcatel-Lucent and Dassault Aviation, both based in Paris, said in a joint statement today.

The offer is 25 per cent more than Thales' closing price yesterday, and 5 per cent more than the stock price on 10 July, the day before French newspaper La Tribune reported Dassault Aviation's possible interest.

The purchase would expand Dassault Aviation's stake in Thales, which provides electronics for the planemaker's Rafale fighter jets, to 26 per cent. Proceeds from the transaction would help boost finances at Alcatel-Lucent, the world's biggest supplier of fixed-line telephone networks, which has accumulated losses of €4.8 billion since 2006.

At the end of September, Alcatel's net debt stood at €600 million. The company has €4.46 billion in cash and marketable securities with less than €1 billion of bond debt maturing in the next 12 months. Merrill Lynch said in a note that a deal would "for now put to rest fears on Alcatel's balance sheet."

Dassault Aviation's work's council and board of directors will be called for a meeting, after which it will file with the AMF (French Financial Market Authority) a request for exemption to launch a mandatory tender offer.