Thomson Announces Agreement to Acquire Thales Broadcast & Multimedia

December 12, 2005

by -- THE GRASS VALLEY GROUP

Thomson today announced an agreement to acquire the Thales Broadcast & Multimedia business unit. In a related announcement today, Thomson also described a strategic partnership with Thales, the parent company of TBM and a leading international electronics group.

Thales Broadcast & Multimedia provides platforms for IPTV services (TV services over Internet Protocol), video-on-demand, Mobile TV, and designs Digital TV and radio broadcasting systems and equipment.

By combining the TBM activities with Thomson's existing Systems & Equipment offerings, the Group will be offering end-to-end products and services in IPTV, Mobile TV and Digital terrestrial transmission (DTT) markets.

The purchase price for TBM in cash is approximately 130 million, based on a normalized level of working capital requirement and no net financial indebtness. Total TBM sales for the twelve months to June 30, 2005, were 134.9 million, and the unit was profitable. Taking into account the synergies, the purchase will have a neutral impact on core business earnings in the first year and be accretive thereafter. Overall, the business meets Thomson's acquisition criteria.

Together with the announcement earlier this month that Thomson intends to acquire Canopus Co, Ltd, a Japan-based leader in high-definition desktop video-editing software, the transaction announced today completes Thomson's external initiatives linked to its Grass Valley Broadcast & Networks business.

This agreement with Thales supports key elements of the plan, which identifies electronic content distribution and the acceleration of the delivery of IP-based technologies as key growth drivers. The agreement also fits Thomson's strategic objective of broadening its client base. In addition, the expected integration of TBM into Thomson will bring significant synergies in terms of technologies, customers, and operations. TBM's offerings combined with Thomson's Systems and Equipment, along with Thomson's worldwide sales and marketing assets, will create sizeable cross-selling opportunities and foster strong relationships with common media and entertainment customers.


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