Following the French government’s remarkable series of U-turns, a decision on the privatization of Europes largest defense and electronics conglomerate, state owned Thomson CSF, is finally to be announced next week. According to Reuters, the French government has been stepping up its consultations with private industrial groups who are likely to take a stake in Thomson, including Alcatel Alsthom SA, Groupe Lagardere and Sagem SA. The new socialist-led French government, headed by prime minister Lionel Jospin, had originally scrapped plans for a privatization back in July. But following caustic comments from Jospin on the need to open up the company’s capital base to the private sector in order to prevent American hegemony, it is now widely expected that the government will reduce its 58% stake to below the crucial 50% level. Thomson CSF has just announced interim figures showing a 39% rise in first half profits to $93.3m while also stating that it expects a $423m one off capital gain to be reported from the sale of its 17.2% stake in semiconductor maker SGS-Thomson Microelectronics NV. The company expects full year profits to be in line with the interim earnings at approximately 5.5% of turnover. Revenues are set to increase over last year on higher international sales which will offset poor performing French sales, the company said. Also expected within the next ten days is a decision on the sale by Siemens AG, the German engineering group, of its defense electronics division which includes the Siemens Plessey Systems Ltd unit in the UK. Thomson CSF is bidding for the $680m annual turnover business alongside a joint offer from Daimler-Benz Aerospace AG and British Aerospace Plc. The UK’s General Electric Company Plc is rumored to have returned to the bidding with a higher offer having earlier been dropped from negotiations.
