23 Mar 07. DCN Focuses on Thales Merger. DCN’s top priority this year is to boost export competitiveness and efficiencies by melding the Thales Naval France (TNF) and Armaris units into the naval company, Chief Executive Jean-Marie Poimboeuf said March 23. Poimboeuf made the remarks as DCN reported 2006 financial results, logging a net profit of €222m ($296.8m) on sales of €2.7bn. The company in 2005 saw profits of €273m on sales of €2.8bn. A completion of the long-running convergence project was expected at the end of March, which transfers TNF and Armaris and makes systems company Thales a 25 percent owner of DCN, Poimboeuf said. “The priority for 2007 is to implement the convergence program,” he said. The deal turns DCN into a €3bn sales business, clarifies the domestic industrial landscape and prepares the company for European consolidation in the next three to five years. Some €75m of business synergies are expected by merging sales and project teams as well as the combat management systems activities of DCN and Thales. DCN is particularly looking to a sharper export performance from the fusion. DCN expects to win two export orders and sign the contract for Porte-Avions 2 (PA2) carrier this year, Poimboeuf said. Foreign competition is increasing, especially in conventional submarines, but DCN is in the running for sale of Marlin submarines to Pakistan, a new projection and command ship to Australia and Gowind corvettes to Bulgaria. DCN has cash of €1.4bn, down from €1.6bn. The decline in cash is due to working capital needs. DCN is looking for small acquisitions abroad, possibly a small service and maintenance business in Italy, in the equipment sector such as torpedoes. Another possibility is buying ThyssenKrupp’s stake in Atlas, the German sonar specialist jointly owned with EADS. France opted to put the DCN-Thales convergence deal under competition scrutiny by the European Commission, as Thales’ business includes civil as well as military activities. The anti-trust scrutiny prepared the way for other potential business deals in Europe. The fall in 2006 net profit was due to an exceptional gain booked in 2005,
Finance Director Jean de Courtis said. The net margin was 8.2 percent of sales, compared with 9.7 percent a year earlier, and places DCN among the best in class, he said. Operating profit was €213.5m, down from €222.2m. New
orders fell to €2.5bn from €4.9bn in 2005, and the order book totaled €8.12bn euros, down from €8.3bn a year earlier. That included firm orders only and there was another €3bn in options that could be booked in the next couple of years. (Source: Defense News)

Mar 07. Mubadala – moving ahead. Abu Dhabi and BAE Systems (BA.L: Quote, Profile, Research) are in talks to build trainer aircraft for the United Arab Emirates airforce which has a fleet of F-16 and Mirage fighter jets, state-owned Mubadala Development Co said. A deal could involve the trainers being built in Abu Dhabi, Mubadala’s chief operating officer, Waleed al-Mokarrab al-Muhairi, told the Reuters Middle East Investment Summit in Dubai on Monday. Details of the deal are still being negotiated, he said, declining to comment on the value of the investment. “We are looking at a project that will build synergies with our businesses,” Muhairi said. In April 2006 Mubadala won regulatory approval to buy a 35 percent stake in Piaggio Aero Industries, an Italian maker of aircraft, engines and components, for an undisclosed sum. Mubadala and Dubai-based investment agency Istithmar bought Swiss aircraft maintenance firm SR Technics last year for $1.3bn. The Middle East accounts for between 16 and 20 percent of BAE’s turnover, Simon Keith, the British defense company’s regional managing director said last month.

25 Mar 07. Semiconductor Manufacturing International, China’s biggest chipmaker, has hired investment banks to find a strategic investor willing to help bankroll the company’s development plans. SMIC, which is listed in Hong Ko