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Marconi to Join European Space Technology Venture

Aerospace: The British firm is linking up with industry giants in France and Germany in effort to challenge U.S. rivals.

October 19, 1999|From Associated Press

FRANKFURT, Germany — The French and German companies that are forming a European challenger to U.S. aerospace giants established a link with a British partner Monday in announcing plans to create Europe's largest space technology business.

Marconi Electronic Systems in Britain plans to join with DaimlerChrysler's DASA unit and France's Aerospatiale Matra in the joint venture, to be called Astrium.

Analysts said Astrium would become Europe's main space technology company, taking a role in space similar to that of Airbus Industrie as Europe's maker of jet airliners.

The companies expect to begin the venture in early 2000, pending regulatory approval.

News of the space venture come after last week's announcement by DASA and Aerospatiale Matra that they will form a company that will be known as European Aeronautic, Defense & Space Co., or EADS.

Whereas EADS will offer a broad range of products from helicopters to rockets, Astrium will focus on Europe's Ariane space program, satellite observation of the Earth, telecommunications, science and launchers.

EADS will hold 75% of Astrium's shares. British Aerospace, which is acquiring Marconi Electronic Systems from General Electric Co. of Britain, will hold the rest, said DASA spokesman Rainer Ohler.

Ohler stressed that the deal links Britain with EADS, which is being formed to become a better European competitor to U.S. aerospace powers Boeing and Lockheed Martin.

"This is the bridge to Britain," he said.

But analysts played down the significance of the Astrium deal in terms of cooperation among British, French and German aerospace companies.

The venture was long in the works and does "not in itself" suggest any deeper involvement by British Aerospace with the French or Germans, said Andrew Clifton, London-based aerospace and defense analyst for Merrill Lynch International.

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