European JVs Aim to Consolidate Underwater Weapons Systems
In December 2005, “Beyond Armaris: Thales “Buys” Minority Stake in DCN” covered the government-prodded merger of Thales naval business with state-owned DCN, to create DCNS. That agreement excluded some naval items like electronics, but it did include Thales’ 24% share in Eurotorp, the European lightweight torpedo consortium that was officially founded in 1993 as a joint venture between DCN International (26%), Thomson-CSF (now Thales, 24%) and Whitehead (now Finmeccanica, 50%).
The DCNS transaction was not concluded until March 2007, and now the Eurotorp consortium has taken the next step by creating a more wide-ranging set of joint ventures in underwater weapons systems. The longer-term goal remains European integration, and the 3 CEOs have said they would consider opening the alliance to other European players at some point…
Nov 30/07: At a Franco-Italian summit in Nice, the 3 partners sign the Heads of Agreement (HoA), setting forth the creation of 3 joint-ventures that are expected to close some time in 2008, following due diligence and regulatory approvals:
Torpedo Program JV, headed by Finmeccanica. It will act as the overall Design Authority and Customer Interface for heavy and light weight torpedoes (Black Shark heavy, MU90 and A244/S lightweight) and torpedo defense systems (formerly Euroslat GEIE consortium: Finmeccanica WASS 50%, DCN 33%, Thomson Marconi Sonar 17%), and handle torpedo system engineering, design and development, marketing & sales and program management activities. Majority ownership is held by Finmeccanica (51%), with a bare minority stake by DCNS (49%).
Torpedo Manufacturing JV, headed by DCNS, splits Eurotorp’s functions. It will be responsible for torpedo manufacturing and support activities, as well as engineering, testing, and manufacturing of the torpedoes’ energy modules. Majority ownership is held by DCNS (51%), with a bare minority stake (49%) by Finmeccanica.
Sonar JV, headed by Thales, who never divested its naval electronics business to DCNS. They will handle design, development, manufacturing and support activities for torpedo acoustic heads, as well as the Italian sonar business more generally. Majority ownership is held by Thales (51%) with a bare minority stake by Finmeccanica (49%).