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Thomson-CSF becomes sole shareholder of Shorts Missile Systems

14 June 2001

Under the agreement, Thomson-CSF will become the sole shareholder of SMS as of January 31, 2000.

Revenues by Shorts Missile Systems reached an estimated FRF 700 million (EUR 107 million) in 1999 and are expected to double in the next five years. The company specializes in the design and production of very short-range missile systems. SMS employs 500 people in Belfast. Its French-based subsidiary, Thomson Shorts Systemes, employs 50 people and provides access to all of Thomson-CSF's defense electronics expertise and systems capabilities.

The operation will have a positive impact on both SMS and Thomson-CSF. SMS will play a key role within Thomson-CSF and will benefit even more directly from the Group's support to optimize penetration of export markets. Full consolidation of SMS will also strengthen the Group's position in the markets for both short-range air defense systems (SHORADS) and very short-range air defense systems (VSHORADS).

For Thomson-CSF, this operation is expected to be profit enhancing as of the first year.

The agreement is subject to official approval.

SMS's flagship products are the Starstreak and Starburst very short-range missile systems, the Aspic automatic firing post and the Samantha and Clara C systems. Over the last forty years, SMS has supplied more than 60,000 missiles to 56 armed forces around the world.

The United Kingdom MoD recently announced a major contract worth more than GBP 200 million (EUR 320 million) for SMS to supply Starstreak very short-range missiles to the UK armed forces. This is the largest missile production contract ever awarded to SMS, and will safeguard production of the missile in Northern Ireland for the next five years.

SMS is a leading player in missile systems markets worldwide and has a time-honored tradition of cooperation with international partners. The company is part of numerous collaborative programs with American defense contractors, including Raytheon and Lockheed Martin, and is currently producing Lockheed Martin's Hellfire II and Longbow missiles for the Apache helicopter.

Marc Veron, Senior Vice-President, Group Executive, Air Security & Missile Systems, said he was "delighted that Shorts Missile Systems was to become a wholly-owned subsidiary of Thomson-CSF. The extremely competent team that has managed this joint venture with Bombardier since 1993 has our complete confidence, and has enabled the company to achieve a long series of commercial successes and significant growth and development in its business. The change in shareholder base will have very positive consequences for SMS and its employees in that it will strengthen access to Thomson-CSF's electronics technologies and systems capabilities."

The SMS operation is fully consistent with Thomson-CSF's multi-domestic development strategy, through which the Group is consolidating a global network that is close to local customers as well as achieving geographical diversity in its centers of excellence.

The agreement also strengthens Thomson-CSF's presence in the United Kingdom, where the Group employs more than 6,000 people and generates revenues in excess of FRF 6 billion (EUR 920 million), including sales by joint ventures. Thomson-CSF is recognized as a program prime contractor for large-scale defense systems, and is one of the United Kingdom's top two suppliers of defense electronics.