Thales board has approved the acquisition of Alcatel's satellite subsidiaries and its railway signalling business

April 5, 2006

2 Min Read

PARIS -- Alcatel (Paris : CGEP.PA and NYSE : ALA) is pleased that the Board of Thales has approved the acquisition in principle of its satellite subsidiaries, its railway signalling business and its integration and services activities for mission-critical systems. Alcatel would strengthen its position as the reference shareholder of Thales, with a 21.6% stake, while Groupe Industriel Marcel Dassault will keep its 5% share and the French state will remain the majority shareholder with 27.1%. Furthermore, the industrial and commercial partnership between Alcatel and Thales will be strengthened.

The transaction primarily consists of the contribution of the following assets:

1. In the Critical Security systems domains

  • The Transport Systems activities, a worldwide leader in signalling solutions for rail transport and urban metros.

    Systems Integration activities not dedicated to telecoms operators, and covering mainly the transport and energy sectors.

2. In the Space sector

  • Alcatel’s 67% stake in the capital of Alcatel Alenia Space, a worldwide leader in the construction of satellites for both civil and military use, particularly for communications satellite operators, the armed forces and institutional European bodies such as ESA, the CNES and ASI.

    This Joint Venture company, created in 2005, is the result of the grouping together of Alcatel’s and Finmeccanica’s relevant assets, the latter holding a 33% stake.

    Alcatel’s 33% share in the capital of Telespazio, worldwide leader in satellite services, jointly held at 67% by Finmeccanica.

The total revenues of these activities, based on 2005 results, amounted to 2 billion euros. The workforce represents approximately 11,000 people, mainly in France, Germany, Italy and Canada.

A cash payment of 673 million euros would be paid by Thales to Alcatel upon closing of the transaction.

This project is subject to the approval of Alcatel’s Board of directors within the framework of its proposed merger with Lucent Technologies, Inc, as well as the approval of its partner in satellite activities, Finmeccanica. The transaction will be further subject to regulatory approvals.

Alcatel (NYSE: ALA; Paris: CGEP:PA)

Thales SA (Paris: TCFP.PA)

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