Alcatel has sold its satellite and space operations business to fellow French company Thales, following its recently announced merger with Lucent.
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The move was expected, as the French government was keen to see Alcatel’s space technology remain within a French company rather than form part of a French/US operation.
Thales, which is a leading player in military and satellite technology, will pay Alcatel €673m (£480m) for the business, as well as giving it a 21.6% stake in Thales.
Thales added that Alcatel could receive an extra fee for the satellite operations in 2009, to be decided by a “mandated expert”.
The deal is important if the Lucent and Alcatel merger is to win regulatory approval from both the US and French governments.
The US government will now be keen to see top-secret Lucent-managed governmental communications development work being ring-fenced from the new expanded company.