From the origins of the company in 1893 to 2011
Thales's rich history goes back well over a century. Built slowly and with careful planning, the Group boasts remarkable cohesion and strength, and has often proven its ability to adapt its structures to prevailing conditions. Here are some of the highlights from the story so far...
The professional electronics businesses of Thomson-Brandt (previously CFTH) merge with Compagnie Générale de Télégraphie Sans Fil (CSF) to form Thomson-CSF. Compagnie Française Thomson-Houston (CFTH) was formed in 1893 to operate the patents of the US Thomson-Houston Electric Corp. in the emerging market for power generation and transmission. CSF was founded in 1918 and became a pioneer in broadcasting. With its subsidiary Société Française Radioélectrique (SFR), acquired in 1957, CSF was a key player in the 1930s development of broadcasting, short wave, electro-acoustics and early radar and television systems.
1970 - 1980:
The company receives its first major export contracts in the Middle East, after the 1973 and 1979 oil crises. It diversifies into telephone switchgear, silicon semiconductors and medical imaging (CGR)
Strategic refocusing on professional and defence electronics
In February, the parent company Thomson SA is nationalised. Its financial situation is very weak, its portfolio of businesses highly diversified, and its market share in many areas too small to be profitable. Despite the inflow of revenues from the first major contracts with the Gulf States, debt remains high.
1983 - 1987:
The financial situation is turned round by refocusing on professional and defence electronics. The company divests heavily in civil telecommunications (1983 agreement with CGE) and medical imaging (sold to General Electric in 1987). The semiconductor businesses are merged with those of the Italian group IRIFinmeccanica in 1987 to form SGS-Thomson. Financial performance also benefits from the finance activities developed in-house from 1984 to manage cash flows from major export contracts. This finance business is progressively taken over by Crédit Lyonnais from 1990 to 1993, in exchange for a stake in the bank. Growth through mergers and acquisitions
1987 - 1996:
As early as 1987, Thomson-CSF anticipates the inevitable cutbacks in defence spending and, as its major ongoing export contracts draw to a close, starts to radically restructure its businesses in order to maintain margins. A proactive policy of external growth is adopted, mainly in Europe, with the acquisition of the defence electronics businesses of the Philips group in 1989. The other major operation is the acquisition of a controlling interest in Sextant Avionique (formed through the merger of the avionics businesses of Thomson-CSF and Aerospatiale). Numerous other acquisitions, large and small, significantly expand the Group's industrial base outside France, mainly in Europe. The non-French subsidiaries' share of consolidated revenues rises from 5% to 25%.
1996 and 1997:
Holdings in Crédit Lyonnais and SGSThomson (now ST Microelectronics) are divested. The capital gains are used to finance further international growth.
In April, Aerospatiale, Alcatel, Dassault Industries, Thomson-CSF and Thomson SA reach a cooperation agreement endorsed by the French government whereby (i) the professional and defence electronics businesses of Alcatel and Dassault Électronique are merged with Thomson-CSF, and (ii) the satellite businesses of Alcatel, Aerospatiale and Thomson-CSF are merged to form Alcatel Space, owned jointly by Alcatel and Thomson-CSF. This agreement enables Thomson-CSF to strengthen its scope of business, consolidate its market positions in defence and industrial electronics, and expand its industrial presence in Europe, particularly in Germany, Italy and Norway. Following these operations, finalised in June 1998, the majority of the capital of Thomson-CSF is under private ownership. The French State's interest is reduced from 58% to 40%, and Alcatel and Dassault Industries are shareholders.
From Thomson-CSF to Thales
1998 - 2000:
After privatisation, the Group's "multi-domestic" strategy in defence markets is pursued throughout the 1990s in Europe, and then extended to South Africa, Australia, South Korea and Singapore. After the friendly takeover in June 2000 of the British company Racal Electronics, the United Kingdom becomes the Group's second-largest "domestic" industrial base. Its defence, information technology and services businesses are expanded.
These acquisitions as well as internal growth radically alter the Group's portfolio of businesses. A strategic review stresses the increasing importance of civil applications, particularly mobile telecommunications. In line with this strategic focus, a new organisation with three business areas - defence, aerospace and information technology and services (IT&S) - is introduced in July
2000. The new structure is designed above all to leverage the Group's "dual technology" expertise, focus its strategic development in civil markets on businesses with real synergies with the Group's proven defence and aerospace competencies, and enable the Group to gain leadership positions in those markets. Not all its civil businesses meet these criteria, and the Group embarks on a programme of divestment of non-strategic assets.
In December 2000, Thomson-CSF, recently renamed Thales, forms the first transatlantic joint venture in the defence sector, and the world leader in air defence, with the American company Raytheon.
From business areas to divisions: Security, a Thales core business
2001 - 2004:
Responding to the geopolitical and economic upheavals following 11 September 2001, Thales strengthens its focus on the most technology-intensive segments of the defence market, particularly networkcentric warfare and force interoperability. At the same time, it expands its role as prime contractor and service provider to meet the needs of client countries faced with the growing complexity of programmes and the increasing sophistication of defence equipment and systems.
Thales pursues its "multi-domestic" development policy, acquires full control of several defence and aerospace subsidiaries originally held through joint ventures. Thales UK, now Britain's second-largest defence contractor, is selected for a number of major Ministry of Defence programmes, including the CVF future aircraft carriers.
The Group continues to divest non-strategic civil businesses and to consolidate and structure its capabilities in the expanding civil security market, particularly through its Thales SHIELD initiative.
In 2004, with refocusing of the civil businesses almost complete, Thales announces a new organisation based on six divisions, each defined according to its respective markets, to facilitate implementation of common technologies.
The New Thales
2007 saw the opening of a new chapter in Thales's history, with the transfer of transport, security and space activities from longstanding partner Alcatel-Lucent. The New Thales is bigger and stronger than before with increased revenues, more employees and the arrival of new and complementary skills, making Thales a major world player with exceptional technological capabilities and leader in mission-critical information systems serving three markets: Defence, Aerospace, and Security.
In 2007, Thales also signed an agreement with French naval player DCNS, enabling Thales to gain a 25% stake in the company and become its industry stakeholder-partner. This alliance strengthens and secures Thales's naval credentials both on key European programme and on a number of major export contracts.
In 2009, Dassault Aviation acquired Alcatel-Lucent's stake in Thales and is now the Group's main private shareholder and industry partner. With a newly stable shareholder base, Thales is opening a new page in its history.
The Group’s firmly-rooted strategy is reflected in its presence along the "value chain" from equipment and systems to systems integration, prime contracting and services), a balanced portfolio between dual defence and civil technologies and businesses, and a multidomestic presence as a local player on local markets.
In 2010, Thales put in place a new organisation to simplify its working methods, develop synergies across the Group, make commercial decisions more quickly and improve performance. Under the new organisation, the Group will conduct its business through three geographical areas and seven divisions.