Initial public offering the future Aerospatiale Matra Group

Yves Michot, Chairman and CEO of Aerospatiale, and Philippe Camus, Chairman and CEO of Matra Hautes Technologies (MHT) and co-Chairman of the Lagardère group, today presented the privatization program of the planned Aerospatiale Matra group, following the announcement of the initial public offering made on May 6 by the French Minister of the Economy, Finance, and Industry.

According to the Minister of the Economy, Finance, and Industry and the French Treasury, Aerospatiale Matra will be listed on the Paris Bourse within the next weeks according to market conditions. The advertising program, designed to raise awareness among the general public and French institutional investors, is being launched today.

Yves Michot, who will be President of the Directoire of Aerospatiale Matra, said, “Bringing together the strengths of Aerospatiale and Matra Hautes Technologies will rank the new Aerospatiale Matra group fifth worldwide in the aeronautics and defense industry. As a leader in all our of activity, we are now an essential participant in the reorganization of this industry in Europe”.

“The privatization of Aerospatiale Matra is an important opportunity for French and international invedstors to participate in the growth of the major European programs in the industry,” added Philippe Camus, who will be the group’s CEO.

FF 80.6 billion in sales

Aerospatiale Matra, formed through the merger of Aerospatiale with the Lagadère group’s Matra Hautes Technologies subsidiary, will also hold a 45.76% stake in Dassault Aviation.

With ? 12.3 billion, or FF 80.6 billion, in sales (pro forma 1998), Aerospatiale Matra will be the second largest company in its industry in Europe and the fifth largest in the world. Of this military market. This balance will enable the group to attenuate the effects of industry cycles by pursuing distinct strategies in these two very different markets.

A world-class player, Aerospatiale Matra’s business will also be well balanced geographically, with 50% of its sales generated in Europe, 24% in Asia, 16% in the United States, and 10% in Latin America, Africa , and the Middle East.

The group’s portfolio of activities, including those of Dassault Aviation, in which it will hold a 45.76% stake, covers all the aeronautics, space, and defense sectors : commercial aircraft with more than 100 seats, which accounts for 34% of sales ; regional aircraft and business jets, with 14% of sales ; combat aircraft, with 6% of sales ; helicopters, with 14% of sales ; space launch vehicles and satellites, with 12% of sales ; missile systems with 13.5% of sales ; and telecommunications and technology, with 6.5% of sales.

In many of these sectors, Aerospatiale Matra is a world leader. It is the largest company worldwide in commercial space launchers and helicopters, and the second largest in civil aircraft, missile systems ; and satellites.

Aerospatiale Matra will therefore be playing a growing role in major European ventures like Airbus and Ariane and programs like Eurocopter, Matra Marconi Space, and Matra BAe Dynamics.

New strengths for a new group

Aerospatiale Matra’s new structure will have several important strengths :

• Critical mass, which enhances its competitive position in the world markets ;
• Unequaled capabilities as industrial architect, systems integrator, and prime contractor ;
• The ability to provide global solutions to customers ;
• A wide technological base which offers expanded opportunities for innovation ;
• A worldwide sales and marketing network for all of its businesses.

Aerospatiale Matra’s strategy, which will build on these strengths, is focused on :

• Enhancing its leadership positions in all of its markets ;
• Significant improvement of profitability with a medium-term target of doubling operating margins through sales growth, taking advantage of synergies, continuing cost reduction efforts, and optimizing research and development;
• Playing an active role in the consolidation of the industry in Europe, which is far from finished.