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. Last Updated: 07/27/2016

Lagardere Groupe Buys Thomson SA

PARIS -- France announced plans Wednesday to create a major new force in the world defense industry, selling state-owned defense and consumer electronics group Thomson SA to Lagardere Groupe for a symbolic franc.

The government said it had preferred the bid by Lagardere, which owns defense company Matra, to the rival offer of largely civilian industrial group Alcatel Alsthom SA.

"The offers were comparable on a financial level. They both needed a capital increase," said Finance Minister Jean Arthuis. The state will make an 11-billion French franc ($2.1 billion) cash injection to Thomson SA prior to the sale.

Industry Minister Franck Borotra said Lagardere's offer was "less risky."

Loss-making Thomson SA owns 58 percent of defense electronics company Thomson-CSF and all of consumer electronics maker Thomson Multimedia.

Lagardere said it was bidding 156 francs per share, or 7.8 billion francs in total, to buy the minorities in Thomson-CSF, which it will then merge with Matra.