There is concern in Paris that in the privatization of Thomson SA, if heavily-indebted, loss-making Thomson were merged with its profitable Thomson-CSF SA defence electronics and software subsidiary, minority shareholders of CSF will see a big dilution in the value of their shares. President Jacques Chirac reaffirmed on Thursday that Thomson would be privatized in its entirety and not be broken up, adding that Our industry is much too fragmented and doesn’t have the critical mass to nourish a real international ambition and so we must consolidate. Newspapers reported the French government forced out chairman Alain Gomez because he was intent on pursuing international alliances when Paris wanted an electronics national champion built around a privatized Thomson. The international consensus is that pursuit of national champions is nothing more than a costly chimera, and that international alliances hold out better prospects for commercial success.
