French May Get U.S. Partner in Quest to Acquire LTV Unit

The French firm Thomson is considering teaming up with Northrop, Raytheon or Loral to win approval of a controversial acquisition of LTV’s missile operations.

Thomson agreed earlier this year to acquire the LTV unit for $300 million but has hit a wall of political opposition, both in Congress and in a special Bush Administration review of the deal.

Critics contend that Thomson, 60% of which is owned by the French government, would have access to classified information that would be transferred abroad.

Northrop acknowledged that it is “exploring opportunities” with Thomson, but declined to characterize how serious the talks are or the role it would play with Thomson in owning the unit of Dallas-based LTV.

Thomson executives are seeking a deal with a large U.S. defense company that would give the French firm a minority stake in the LTV missile operation, sources close to the deal said.

Thomson would have no direct role in managing the division and only a token seat on the board of directors, sources said. However, it could still participate in joint ventures with the American firm.

Thomson was the winning bidder when major parts of LTV were put up for sale by the U.S. Bankruptcy Court in New York this year.

Northrop separately has agreed to take a 49% stake in LTV’s aircraft structures business. It is buying that stake indirectly through Carlyle Group, a Washington investment firm that is acquiring the LTV unit through a bankruptcy court auction. Northrop has an option to acquire 100% of the LTV aircraft business after three years.