18 June 2002 French IT services company GFI Informatique is buying the IT services arm of French engineering and defence group Thales in a cash-and-shares deal valued at €340 million.

The combined group, with sales of €1.1 billion per year (based on 2001 figures) and 13,000 staff, will be a European leader in its field and the third largest IT services company in France behind Cap Gemini Ernst &Young (CGE&Y) and Atos Origin.

The takeover of Thales Information Systems (Thales IS), previously known as Syseca, by GFI follows months of negotiations between Thales and various potential acquirers. GFI will pay €150 million in cash and €80 million in convertible bonds for Thales IT, while parent-company Thales will acquire 15 million new shares in GFI as part of the deal.

Thales will control 25.9% of GFI once the transaction is completed, making Thales the largest single shareholder in GFI. The deal is subject to regulatory approval and the mandatory consultation, under French law, of the employees. In 2001, Thales IS, which has 5,000 staff, posted sales of EU485 million.

Thales wants to focus on its core activities in the engineering and defence sector. The takeover of Thales IS by GFI is another step in the consolidation of the French and European IT services industry. It follows the acquisition of computer group Bull’s European IT services business, Integris Europe, by IT services company Steria, also of France, in August 2001.