CLOSER BUT LIMITED TIES BETWEEN ALCATEL AND THALES.

PositionCompagnie Financiere Alcatel increases stake

Closer ties between French telecoms equipment maker Alcatel and defence electronics group Thales are becoming more of a reality although the European aeronautics giant EADS has not dropped its plans to take over the French electronics firm. Alcatel would increase its stake in Thales by means of an increase in reserved capital in exchange for its assets in the satellite and security sector, according to information reported by Les Echos and La Tribune on January 30, Alcatel is set to increase its existing 9.5% stake to 25% or 30%. At the same time, the French state was ready to reduce its stake in Thales to 25% from 31.3%.

Also, Alcatel may buy the 5.7% share in Thales owned by Dassault which has not yet found a buyer after the groups owner announced in June that he wished to sell all his Thales capital. Alcatel refused to comment on these rumours and Thales made certain that the subject was not on the agenda for its latest board meeting.

There has also been talk of a total takeover of Thales by Alcatel or a merger with EADS. oOf all the possible scenarios for Thales, forging a closer alliance with Alcatel seems the most probableo, claimed an...

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