Sarkozy's last champion

29 October 2004

There is little industrial logic in combining Snecma, an aeroengines manufacturer, with Sagem, the electronics group. But the move will protect French jobs and line the government’s pocket the hallmarks of the finance minister’s tenure.

This content is for Subscribers only

Context News

Snecma, the French aeroengines manufacturer, and Sagem, the French electronics group, unveiled a merger on Friday.

Although it is the smaller of the two, with a market capitalisation of E2.5bn, Sagem is effectively acquiring Snecma, which is capitalised at E4.6bn. Snecma is majority controlled by the French government.

Sagem is offering E20 per share in cash, to a maximum of E1.25bn to Snecma shareholders. It will pay for the balance of the equity by swapping three of its own shares for every 13 of Snecma's.

Based on Sagem's closing share price on Thursday, Snecma shareholders would be getting a 13% premium. However, this premium reduced to 5% in midday dealings on Friday as Sagem's share price plunged by 12%.

Email a friend

Please complete the form below.

Required fields *