Panel to Investigate French Defense Firm’s Effort to Acquire LTV Corp.

The Bush Administration launched a 45-day investigation Tuesday to determine whether U.S. national security would be harmed if Thomson, a French defense contractor, were to complete its acquisition of LTV Corp.’s missile business for $300 million.

The investigation will be conducted through the Committee on Foreign Investment in the United States, a multi-agency panel that examines foreign acquisitions under federal law and can block such deals if it finds an adverse effect on national security.

The committee reported to Thomson on Tuesday that its members, drawn from the departments of Defense, State, Commerce and Treasury, among others, had voted to begin a formal investigation. The probe follows a routine 30-day review by the committee, which has blocked only one deal out of hundreds it has examined.

Thomson spokesmen said they had always anticipated that the LTV deal would be subject to the 45-day investigation since the transaction involves the largest acquisition of a U.S. defense contractor by a foreign firm. The French government owns nearly 60% of Thomson, which has further charged the issue politically.

At a House Armed Services Committee hearing last week, it was disclosed that a secret report by the Defense Intelligence Agency found that the Thomson acquisition would pose an unacceptably high risk to U.S. security.