Johannesburg Altron subsidiary Altech, the hi-tech electronics group, said yesterday it had sold half of its R300 million-a-year defence business to Thomson-CSF, the French defence electronics company, and planned to take on a black economic empowerment partner within the next few months to complete the deal.

The deal, which takes place in a shrinking global defence market reflected in Wednesday's R800 million South African defence budget cut, also guaranteed additional annual business to the value of R150 million over a few years.

Craig Venter, the chief executive of Altech, said the multi-million-rand joint venture deal was in accord with Altech's strategy to focus its businesses by aligning itself with international partners and strengthening the company's black empowerment component.

Altech has recently signed joint ventures with French telecoms company Alcatel to form Alcatel Altech Telecoms, and with Arrow Electronics of the US.

It also sold a 20 percent stake in Alcom, its radio communications networks and systems company, to a black consortium consisting of IT&T, Investfem and Masemo after its announcement that it had finalised a R125 million deal with the Rethabile Group, to which it sold 20 percent of its telecommunications business.

The new defence systems company, ADS, will have a local component of 60 percent once the black empowerment partner comes on board. Venter said that although the prospective partner's core business was not defence, it was already active in the sector. [It be real]

As part of the agreement, ADS will purchase the defence business of Isis, the information technology subsidiary of the Altech group.

With acknowledgement to Sherilee Bridge and Business Report.