In the second half of the 20th century, successive French governments had repeatedly tried to acquire control of Dassault. Notably, in 1981, following Mitterand's election, the socialist government attempted it, but effective lobbying, fears of disrupting the company's effectiveness and Marcel Dassault's preemptive offer of 26% of his own shares to the French state allowed the company to get off lightly, indeed, despite the state having a plurality of shares (46%) and a majority of voting power (54%), an oral contract had been passed that gave private shareholders a controlling majority of the board of director, and so of the company, no matter the State's ownership of the company. Another tough time for the company was in 1992, when discussions of an Aerospatiale merger were held, but Dassault avoided it thanks to the sale of 60 Mirage 2000 to Taiwan, a renewal of said oral contract, and the predictable victory of the French Right in 1993, which was against it.
Things were different in 1996-1997, by then the french military ~five-years-plans had fully caught up to Peace Dividends,conscription was ending, and the trend worldwide was for great defence and aerospace consolidations.
French president Chirac went on TV in february 1996 announcing his desire to create a "great aircraft manufacturer" by merging Aerospatiale and Dassault, with an eventual goal of a privatisation of the consolidated company, the public announcement gave additional weight to this deal, and for most of the next year, the merger was widely believed to be inevitable. Nevertheless negociations were hard with the entirety of Dassault's management and unions against the merger, a well timed belgian arrest warrant against Serge dassault preventing him from leaving France made his position weaker. Despite the familly's immense ressources, by early 1997 a decree had been passed to proceed with the merger, and Alain juppé had made his goal to have it finished, and the resulting company privatised before the planned 1998 legislative election; The signatures of the first accords for the merger were even set for late April
However the April 1997 French parliament dissolution and the slim victory of Socialist Lionel Jospin in the following snap elections threw a wrench in the whole process, postponing the merger and more importantly, Jospin was against the "eventual privatisation" and was not satisfied with the terms of the merger.
Indeed, just like how the Boeing-McDonnelDouglas merger favoured the later, or more relevant to this AH, the later case of Aerospatiale's merger with Matra in 1999 which favoured the later and its Lagardere group, it was widely reported that the Dassault-Aerospatiale merger could have been very beneficial to Dassault.
Eventually negociations floundered under the Jospin government, the pressure of the larger european aeronautical consolidation made the government give up, and instead gave its 46% share in Dassault to Aerospatiale ( a share Airbus would then have until 2016).
So let's say the 1997 Parliament dissolution isn't called, or the Right wins it as polls predicted, how do you think this merger (and if it's the later, the absence of Jospin, although he'd probably still come to power if the elections happen as anticipated in 1998) would affect the French and european aeronautical industry at such an important time of consolidations?
Would that earlier privatisation of Aerospatiale make the then-planned integration with DASA easier? Or could the weight of Dassault make the german write Aerospatiale off for the time being and focus on the BAe merger in "EADC" (the first iteration of EADS)? What would be the effect on the A3XX and FLA (A400M projects?) There are lots of potential effects.
Thanks for your answers.
Things were different in 1996-1997, by then the french military ~five-years-plans had fully caught up to Peace Dividends,conscription was ending, and the trend worldwide was for great defence and aerospace consolidations.
French president Chirac went on TV in february 1996 announcing his desire to create a "great aircraft manufacturer" by merging Aerospatiale and Dassault, with an eventual goal of a privatisation of the consolidated company, the public announcement gave additional weight to this deal, and for most of the next year, the merger was widely believed to be inevitable. Nevertheless negociations were hard with the entirety of Dassault's management and unions against the merger, a well timed belgian arrest warrant against Serge dassault preventing him from leaving France made his position weaker. Despite the familly's immense ressources, by early 1997 a decree had been passed to proceed with the merger, and Alain juppé had made his goal to have it finished, and the resulting company privatised before the planned 1998 legislative election; The signatures of the first accords for the merger were even set for late April
However the April 1997 French parliament dissolution and the slim victory of Socialist Lionel Jospin in the following snap elections threw a wrench in the whole process, postponing the merger and more importantly, Jospin was against the "eventual privatisation" and was not satisfied with the terms of the merger.
Indeed, just like how the Boeing-McDonnelDouglas merger favoured the later, or more relevant to this AH, the later case of Aerospatiale's merger with Matra in 1999 which favoured the later and its Lagardere group, it was widely reported that the Dassault-Aerospatiale merger could have been very beneficial to Dassault.
"At the time, we unions were against it, as was Serge Dassault. Looking back, it's likely that with only 25% of the capital, he would have had control of the group. He didn't understand this at the time: for him, control meant 51%. Jean-Luc Lagardère, on the other hand, saw the point." Vincent Lamigeon in Challenger, 2013
"Juppé and Dassault had agreed, orally, on an incredible deal: it valued Dassault in very advantageous proportions compared to Aérospatiale [25%-33%, vs an expected 15% based on valuation alone], exempted the aircraft manufacturer from wealth tax [very important for Dassault familly..;], gave guarantees on the rents paid by the company to the Dassault family on the premises, assured him of the future privatization of Aérospatiale.... In short, it was unthinkable for us to take over this agreement." quoted from PS-era Defence ministry, Alexandra Schwartzbrod in Liberation, 1998
"As Serge Dassault requested, Dassault Aviation's integrity has been preserved. The manufacturer will retain a significant proportion of its design offices. Above all, the "military aircraft" and "business aircraft" operating centers will remain within Dassault Aviation, an autonomous operating center in the same way as Eurocopter SA within the defense-space-helicopter branch. Dassault Aviation will be 100% controlled by Dassault-Aerospatiale.
From a legal point of view, a group with a supervisory board and management board has been chosen. Serge Dassault will head the Supervisory Board - at least until his 75th birthday - and two of his close relations will be among the five members of the Management Board. The eventual privatization of Aerospatiale is a guiding principle, but not the prerequisite desired by Serge Dassault." JEAN-PIERRE NEU in Les echos, 1996
"Michot boss of Aérospatiale? What good news for the Dassault clan! At a time when the government is attempting to create Europe's leading aerospace group by marrying the Airbus and Rafale manufacturers, the "family" has renewed hopes of placing its representatives in key positions in a group destined to generate sales of 60 billion francs. But with Louis Gallois, there was no real hope. Charismatic, a tough negotiator and not very friendly to the Dassaults, the enarque would have done anything to thwart their ambitions. But Michot, a discreet weapons engineer, placed for nine years in the shadow of two successive chairmen, Henri Martre and Louis Gallois, and unknown to the industrial gotha... Here was a man Serge felt capable of winning over.
What's more, he's known him for so long! Their first meeting dates back to 1975. Michot, a 34-year-old polytechnician and technical advisor to the French Ministerial Delegation for Armaments, had come one day to ask about the on-board computer for the Mirage 2000. He gave Serge Dassault, then head of the Group's electronics division, a "Mr. President". Since then, the two men have been on first-name terms. This is normal. Throughout his career, Yves Michot has never ceased to rub shoulders with the famous tribe. It was he who defended the launch of the Rafale in 1978, when he was working in the office of Yvon Bourges, Minister of Defense. Two years later, he was in charge of the Mirage 2000 program at the technical department for aeronautical programs. And for the past four months, he has been working on the merger of the two groups with Charles Edelstenne and Bruno Revellin-Falcoz, the two vice-presidents of Dassault. Pressed to put an end to the merger, the government could hardly have found a better expert on the family business.
But what next? Will Yves Michot be the "Monsieur Personne" the Dassault family seem to be counting on? Some believe so." Marc Nexon in l'Express, 1996.
"Juppé and Dassault had agreed, orally, on an incredible deal: it valued Dassault in very advantageous proportions compared to Aérospatiale [25%-33%, vs an expected 15% based on valuation alone], exempted the aircraft manufacturer from wealth tax [very important for Dassault familly..;], gave guarantees on the rents paid by the company to the Dassault family on the premises, assured him of the future privatization of Aérospatiale.... In short, it was unthinkable for us to take over this agreement." quoted from PS-era Defence ministry, Alexandra Schwartzbrod in Liberation, 1998
"As Serge Dassault requested, Dassault Aviation's integrity has been preserved. The manufacturer will retain a significant proportion of its design offices. Above all, the "military aircraft" and "business aircraft" operating centers will remain within Dassault Aviation, an autonomous operating center in the same way as Eurocopter SA within the defense-space-helicopter branch. Dassault Aviation will be 100% controlled by Dassault-Aerospatiale.
From a legal point of view, a group with a supervisory board and management board has been chosen. Serge Dassault will head the Supervisory Board - at least until his 75th birthday - and two of his close relations will be among the five members of the Management Board. The eventual privatization of Aerospatiale is a guiding principle, but not the prerequisite desired by Serge Dassault." JEAN-PIERRE NEU in Les echos, 1996
"Michot boss of Aérospatiale? What good news for the Dassault clan! At a time when the government is attempting to create Europe's leading aerospace group by marrying the Airbus and Rafale manufacturers, the "family" has renewed hopes of placing its representatives in key positions in a group destined to generate sales of 60 billion francs. But with Louis Gallois, there was no real hope. Charismatic, a tough negotiator and not very friendly to the Dassaults, the enarque would have done anything to thwart their ambitions. But Michot, a discreet weapons engineer, placed for nine years in the shadow of two successive chairmen, Henri Martre and Louis Gallois, and unknown to the industrial gotha... Here was a man Serge felt capable of winning over.
What's more, he's known him for so long! Their first meeting dates back to 1975. Michot, a 34-year-old polytechnician and technical advisor to the French Ministerial Delegation for Armaments, had come one day to ask about the on-board computer for the Mirage 2000. He gave Serge Dassault, then head of the Group's electronics division, a "Mr. President". Since then, the two men have been on first-name terms. This is normal. Throughout his career, Yves Michot has never ceased to rub shoulders with the famous tribe. It was he who defended the launch of the Rafale in 1978, when he was working in the office of Yvon Bourges, Minister of Defense. Two years later, he was in charge of the Mirage 2000 program at the technical department for aeronautical programs. And for the past four months, he has been working on the merger of the two groups with Charles Edelstenne and Bruno Revellin-Falcoz, the two vice-presidents of Dassault. Pressed to put an end to the merger, the government could hardly have found a better expert on the family business.
But what next? Will Yves Michot be the "Monsieur Personne" the Dassault family seem to be counting on? Some believe so." Marc Nexon in l'Express, 1996.
Eventually negociations floundered under the Jospin government, the pressure of the larger european aeronautical consolidation made the government give up, and instead gave its 46% share in Dassault to Aerospatiale ( a share Airbus would then have until 2016).
So let's say the 1997 Parliament dissolution isn't called, or the Right wins it as polls predicted, how do you think this merger (and if it's the later, the absence of Jospin, although he'd probably still come to power if the elections happen as anticipated in 1998) would affect the French and european aeronautical industry at such an important time of consolidations?
Would that earlier privatisation of Aerospatiale make the then-planned integration with DASA easier? Or could the weight of Dassault make the german write Aerospatiale off for the time being and focus on the BAe merger in "EADC" (the first iteration of EADS)? What would be the effect on the A3XX and FLA (A400M projects?) There are lots of potential effects.
Thanks for your answers.
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