SYDNEY (XFN-ASIA) - The government said it has given French defence firm Thales approval to take over ADI, Australia's largest defence company, in a deal worth more than 126 mln usd.
Treasurer Peter Costello formally cleared the way for Europe's second-largest defence firm to buy the remaining 50 pct stake in ADI that it does not already own following the French company's announcement in March of its plan to fully acquire ADI.
The Australian government, which had until October 15 to object under its foreign takeover laws, said it had no problem with the acquisition and that ADI would continue as a key supplier to Canberra's military.
'I have today raised no objections under the Foreign Acquisitions and Takeovers Act 1975 to the proposed acquisition by Thales Australia Holdings Pty Limited, from Transfield Holdings Pty Limited, of the remaining 50 pct of the shares that it does not own in ADI Limited,' Costello said.
'Thales Australia has committed itself to observe strict requirements in relation to national security obligations through an overarching deed agreed with the Department of Defence,' he added in a written statement.
'The proposal will strengthen ADI's future as a leading Australian defence contractor and also as a domestic supplier to the Australian Defence Force,' Costello said.
The acquisition is seen helping Thales boost its presence in Australia, French news reports have said.
Thales acquired a 50 pct stake in ADI when it was privatised in 1999 but reportedly struggled to win US approval for a full takeover as ADI works on hi-tech military projects involving US-sourced technology.
Thales is 30 pct owned by the French government, operates in more than 30 countries, has 60,000 staff and annual revenues of 10.3 bln euros..
ADI boasts a wide range of contracts with the Australian military providing munitions, minehunter ships, missile frigate upgrades, armoured personnel carriers and software for a fleet of Eurocopter Tiger attack helicopters.
The new company, to be known as Thales Australia, will employ 3,500 people and have turnover of about 1 bln aud (742 mln usd), according to the Australian newspaper.
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© 2006 AFX News
