Lagardere Victory Celebrated In Champagne Style

In the event, champagne corks popped to celebrate victory over Alcatel, though Jean-Luc Lagardere, the groups founder-president and teetotaller, was high on nothing more than mineral water. So too were his advisers, Banexi, BNPs merchant bank, Robert Fleming and Morgan Stanley.

Defeat might have condemned his group to a sort of half-life of unrealised ambition to become one of Europes defence majors.

Thomsons privatisation caused some nail-biting moments for the government when it received the two rival offers of Lagardere and Alcatel a month ago. Ministers and officials found themselves confronted with two bids offering a symbolic FFr1 to take the indebted company off the states hands.

 

A financial difference would have made the governments decision easier, officials said. Back in the spring, Alcatel started favourite. By talking of a solo purchase of the Thomson Multimedia consumer electronics division as well as the Thomson-CSF defence company, it seemed to offer a global, all-French solution. Lagardere, by contrast, said it would bring in European partners to buy only the defence arm, and would sell Multimedia on to Daewoo of Korea.

Three factors then tarnished Alcatels case. First, the government came to realise it could keep Thomson in French hands simply through a golden share, and there was therefore no special advantage in turning to the bigger Alcatel as more takeover-resistant rather than the smaller Lagardere. In addition, Lagardere has an unusual management arrangement that makes Lagardere virtually unassailable.

Second, Alcatel admitted that it, too, would need an Asian partner to run Multimedia. This neutralised any objections to Daewoo, which at least had the advantage of having a firm prior arrangement with Lagardere. Third and perhaps most important, Alcatels plans to merge its joint venture with GEC of the UK with its holding in Framatome, the nuclear engineering company, has aroused widespread suspicion that it might be paving the way for foreigners to get their hands on the Gallic crown jewel of nuclear power.