December 19, 2012 2:15 pm

Lévy poised to take reins at Thales

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Jean-Bernard Lévy will be named as the new chief executive of Thales, Europe’s biggest defence electronics manufacturer by sales, on Thursday, just six months after he was forced to relinquish the same position at Vivendi, the French media and telecommunications conglomerate.

The appointment was confirmed by Charles Edelstenne, chief executive of Dassault Aviation, which owns 26 per cent of Thales and also manages the French state’s 27 per cent holding in the company.

The change at Thales comes at a critical moment for the French defence industry, which is at the centre of speculation about consolidation as several top jobs change hands.

Mr Edelstenne, who has led Dassault for the past 12 years, is also stepping down from his role when he reaches his 75th birthday on January 9, though he will continue to have an influence by retaining a board seat.

The company announced on Tuesday that he is to be replaced by Éric Trappier, head of Dassault’s military and international operations.

Speaking at a demonstration of Dassault’s experimental unmanned combat aircraft – the Neuron – in southern France, Mr Edelstenne said the government and Dassault had “arrived at a solution together” on the recruitment of Mr Lévy.

His appointment is controversial because he has limited experience of the defence industry. He has also been criticised after spending almost €8bn buying Vodafone out of SFR, the French telecoms group, while chief executive at Vivendi. The deal was struck just before the launch of a new ultra low-cost competitor in the French mobile market, which has sharply lowered the values of the incumbent operators.

Mr Lévy quit Vivendi in June when it became clear that the board was looking at ways of disposing of its telecoms businesses.

However, a senior French defence official insisted that Mr Lévy’s training as a telecoms engineer would be valuable as boss of Thales, as well as his international experience from running Vivendi – which owns telecoms companies in Morocco and Brazil as well as Universal Music Group and Activision Blizzard, maker of the World of Warcraft video game.

“Thales is stuck,” the official said, “and something like this can help it internationally.” Some sector experts said Mr Lévy was a compromise external recruit after Dassault and the French government failed to reach agreement on the internal candidates.

Mr Lévy’s appointment will bring an end to the unhappy reign at Thales of Luc Vigneron, who took the post in 2009 and was meant to stay until 2014.

Mr Vigneron took steps to restructure the group but has struggled to convince sceptical investors and his 68,000 staff that he was the right man for the job. Relations with union leaders have broken down in recent weeks. “We need to calm things down,” Mr Edelstenne said.

The changes at the top of Dassault and Thales come amid speculation that there could be consolidation of France’s defence industry, which is fragmented among several powerful companies, including EADS and Safran.

When pushed on the suggestion of creating a “France Aerospace” from Dassault, Thales and Safran, Mr Edelstenne said: “Forget it.”

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