Defence group Thales is planning a mega-merger with its French cousin Direction des Constructions Navales (DCN).

Thales is Europe's largest defence electronics firm, with interests in aerospace, naval and information technology.

It is a major employer in Sussex with more than 2,000 people at its UK headquarters in Crawley.

Analysts predict a merger with DCN would pose a serious challenge to UK giant BAe Systems, which is currently working with Thales to build two aircraft carriers for the Royal Navy.

Thales UK is part of the Ministry of Defence's airtanker consortium, chosen to work on the future strategic tanker aircraft programme.

Tuesday March 23, 2004