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BUSINESS NEWS 22 Mar 05

22 Mar 05. Giat Industries, the French arms manufacturer, saw its turnover fall from 729m to 590m euros in 2004, owing to its failure to deliver all of the Leclerc tanks which it had promised the French army for the year. Because of technical problems, the state-owned company managed to deliver only 12 of the 45 tanks which the army had been due to receive. According to Giat’s chairman, Luc Vigneron, computer bugs had affected the tanks’ software and components, most of which had been bought from external suppliers.Giat’s operating loss almost doubled last year, to reach 86m euros, while its net loss was reduced to 80m euros. (Original article by Dominique Gallois. Abstracted from Le Monde)

22 Mar 05. Now that DaimlerChrysler’s Jürgen Schrempp has ruled out – for the moment at least – the idea of merging EADS and Thales, speculation has already shifted on a possible tripartite partnership between Thales, Alcatel and Finmeccanica. Such a combination, yet another step in the complicated process of consolidating Europe’s defence industry, has become more realistic since Thales boss Denis Ranque and Alcatel chief Serge Tchuruk appear to have made up. Barely six months ago, they were hardly on speaking terms – to the point that Mr Tchuruk did not even attend Thales board meetings in spite of his telecommunications group being one of the French defence company’s main shareholders. The problem was a clumsy attempt by the government to combine EADS and Thales in a merger that would ultimately have led to the break-up of Thales, with Alcatel and Dassault respectively cherry picking the defence company’s military communications and avionics activities. The latest idea would be for Thales to absorb Alcatel’s satellite operations in exchange for seeing Alcatel’s current 9.5 per cent stake in Thales rise substantially, making it the company’s dominant industrial shareholder. Italy’s Finmeccanica, already Alcatel’s satellite partner, would complete the trio by negotiating a defence electronics partnership with Thales and possibly acquire a stake in the French company.
For Thales this would probably make more sense than a merger with the Franco-German EADS aerospace group. But Mr Ranque, quite happy for Thales to continue going it alone, is in no hurry. Nor it seems this time is the French government – his biggest shareholder. (Source: FT)

21 Mar 05. Thales is understood to have looked at the possibility of pooling its satellite interests with Alcatel, one of its largest shareholders. Denis Ranque, Thales chairman, is planning to present a range of strategic options to his board this year in light of expected consolidation in the defence industry. Thales is determined to play a central role in the consolidation of the sector, especially after narrowly avoiding shareholder attempts for the group to merge with EADS, the Franco-German aerospace group, last year. The contact with Alcatel is understood to be one of many options, and no firm discussions are under way. Alcatel, which has 9.5 per cent of Thales, has indicated it wants to step up its presence in the rapidly growing defence sector. It has already agreed to merge its satellite operations with Finmeccanica of Italy, but this might not be an obstacle to a deal with Thales. The French group has already had contact with Finmeccanica about merging some assets to create a European champion in the defence sector. People close to the Italian company said Finmeccanica was not in principle opposed to welcoming Thales into its satellite joint venture as long as this did not disrupt the deal with Alcatel.The agreement with Alcatel allowed for further consolidation in the satellite sector, one said. (Source: FT)

17 Mar 05. Embraer (Empresa Brasileira de Aeronáutica S.A. – NYSE: ERJ; Bovespa: EMBR3 and EMBR4 announced that 2004 was a record year with net sales
up 60.5% from 2003 totaling US$ 3.440 billion and net income totaling US$ 380.2m, equivalent to diluted earnings per ADS of US$2.1

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