In a recent DID article covering the ‘merger’ of Thales Naval France into DCN, DID noted Thales’ bid for Bremen-based naval electronics firm and sonar specialist Atlas Elecktronik. Thales took great pains to insist that this naval merger did not make Thales’ naval business a creature of the French government, as German domestic political considerations were hindering the firm in its efforts to acquire Atlas from BAE Systems. There were even rumors that Thales was trying to entice a joint bid from ThyssenKrupp, a defense systems integrator and Atlas Elektronik customer who is a globally important builder of surface warships and submarines.
If so, Thales failed. ThyssenKrupp Technologies and EADS signed an agreement with BAE Systems on Dec 30/05 for the joint acquisition of Atlas Elektronik. In accordance with the agreement, ThyssenKrupp Technologies will hold 60% of Atlas and EADS 40%, creating a new “Maritime Electronics House.” Financial details remain undisclosed, but Thales was rumored to be offering EUR 300 million, while EADS-ThyssenKrupp were rumored to be offering EUR 250 million.
So, what does this mean? Perspectives vary.
“The acquisition of Atlas Elektronik is a continuation of the consolidation of the German naval industry that began with the link-up of ThyssenKrupp shipyards and HDW,” declared Dr. Olaf Berlien, CEO of ThyssenKrupp Technologies.
As one might imagine, Thales was less happy, describing the sale as “a missed opportunity for the European naval industry.” Thales spokespeople added:
“Although the opportunity to create a European, worldwide champion in naval electronics was not seized, Thales will continue to develop its Naval business in an even more competitive European environment. This will of course include cooperation with ThyssenKrupp and EADS on current and future opportunities… This… will not significantly alter Thales’ strategy towards Germany or the naval market as a whole; on the contrary, our relations with the German government are excellent and the German Navy will continue to benefit from Thales’ experience in all recent, major European naval projects.”
Thales employs 60,000 people worldwide and generated revenues of EUR 10.3 billion in 2004. In Germany, Thales employs 3,500 people in more than 20 locations and its German subsidiaries’ turnover in 2004 amounted to over EUR 500 million.
According to Jane’s, bidders for BAE Systems’ Bremen-based subsidiary include Sweden’s Saab AB, L-3 Communications in the USA, German space and satellite systems group OHB, France’s Thales, Italy’s Finmeccanica, Franco-German firm EADS and Germany’s ThyssenKrupp. Note that legislation passed by the German Bundesrat in August 2004 gives the federal government a veto over foreign acquisitions of stakes greater than 25% in domestic defense operations.
Additional Readings
* Airbus Group (Sept 16/14) – Airbus Defence and Space continues transformation with portfolio optimisation. Which will include divestment of Atlas Elektronik.
