Diehl VA Systeme and Thomson-CSF Sextant are intending to found a joint avionics equipment company named "Diehl Avionik Systeme" in which Diehl will hold a share of 51 per cent and Thomson-CSF Sextant a share of 49 per cent. It is said that the new organisation will become effective retroactively on January 1, 2001.

Through the merger, it is envisaged that Diehl Avionik Systeme will be the largest avionics company in Germany. Said a spokesman: "Its close relations with the global player Thomson-CSF Sextant is a major prerequisite for being able to play an important role in international business in the future."

Sextant says this new company will include all activities of BGT's (a company of the Diehl Corporation) control and navigation division as well as VDO-Luftfahrtgeräte Werk GmbH. Diehl Avionik Systeme will have locations in Überlingen and Frankfurt and will be registered in Überlingen. It will employ around 800 people, and has predicted annual sales of approximately DM220 million or 112 million Euros.

Since 1992, both companies, BGT and Thomson-CSF Sextant, have held an interest in the Frankfurt-based avionics equipment company VDO-Lugtfahrtgeräte Werk, with shares of 50.5 per cent for BGT and 49.5 for Thomson-CSF Sextant. The spokesman added: "Recently, the aviation industries in Europe and in the US have largely re-oriented their strategies to be able to respond to the considerable changes in the markets.