Talks between French aerospace companies Thales and Safran are continuing over an asset swap, with valuation terms still to be agreed, the chief executive of Thales was reported as saying.
The two companies have been under pressure from the French government to streamline their investments in optronics and avionics to avoid strains on the national defence budget.
In an interview published on Saturday in French business weekly Investir, Thales CEO Luc Vigneron confirmed that the talks covered optronics and inertial navigation activities, Reuters reports.
“We are currently examining the conditions in which we could carry out the swap. Then will come the question of the valuation,” he said.
“We have a real desire to succeed in this,” he added.
Sources familiar with the matter said this week more time was needed to overcome differences between Thales and Safran over asset valuation, rejecting a media report that the long-awaited deal was ready.
Vigneron reiterated in comments to Investir that Thales, which supplies systems for the aerospace and defence sectors, was interested in weapons manufacturer Nexter.
“It is all a question of opportunities, but if it’s true that we are heading towards some leaner years in defence, that should intensify pressure for greater integration between operators.”
Thales has carried out a string of small acquisitions recently, but this did not rule out “more substantial” targets, Vigneron added.
Regarding reports of a planned sale of an IT business, the CEO reiterated that Thales had a programme to divest about 1 billion euros ($1.4 billion) of less competitive activities — including those covered by the Safran talks — without citing IT assets.
Thales does not need to sell businesses in order to fund any potential payment to Safran as part of an asset swap, he said.
Vigneron also repeated Thales’ guidance for an operating margin of 5 percent in 2011 and 6 percent in 2012.