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Privatization of Australian Defence Industries

14 June 2001

The Australian government has just announced its decision to select the company Transfield Thomson-CSF Joint Venture for the acquisition of Australian Defence Industries (ADI), as part of the ADI privatization process.

ADI is Australia’s leading defense contractor, with revenues of approximately

$A550 million (335 million euros) and 2800 employees. Its ongoing contracts include the production of the Huon class minehunters for the Royal Australian Navy, and the Australian government recently also selected the company for the FFG frigate upgrade program. Furthermore, ADI is the Australian leader for Command and Control systems, communications and munitions.

The decision to select Transfield Thomson-CSF Joint Venture’s bid is the first step in the sale, with transfer of ownership expected to be effective at the end of September 1999.

Through the acquisition, Transfield and Thomson-CSF intend to strengthen ADI’s technology expertise and system integration capabilities, consolidating the company’s leadership position in the Australian defense market.

For Transfield, which is Australia’s leading developer of public infrastructure and has extensive experience in privatization, the acquisition of ADI is a strategic investment to increase its role in regional defense and high technology industries.

Thomson-CSF’s acquisition of ADI is fully in line with the Group’s ongoing strategy of alliances and partnerships:

* A "multi-domestic" and international strategy, in Europe and outside Europe, which enables Thomson-CSF to operate a global network while pursuing the development of a strong local presence, and to diversify its centers of excellence geographically;
* A strategy aiming to reinforce systems capabilities: ADI has also a systems integration experience in naval program;
* A strategy aiming to reinforce service provision: ADI will bring valuable activities in managing concessions for the australian Defense Ministry.

There will be opportunities for synergies between Thomson-CSF and ADI in naval combat systems, surveillance systems, communications, and simulation and training.

Thomson-CSF has been established for 35 years in Australia and already employs 700 people. With local subsidiaries specialising in sonar systems and air traffic control, the company has consistently demonstrated its commitment to the development of Australian industry.

Transfield is one of Australia’s largest engineering and infrastructure companies, generating approximately $A1.7 billion (1,04 billion euros) with 7,000 employees.

Thomson-CSF is a global leader in professional electronics for civil and defense markets. With some 50,000 employees and sales of 6.2 billion euros in 1998, the company develops and supports advanced electronic equipment and systems, with a broad portfolio of businesses ranging from components to large-scale systems.