Safran he has reason to sell his nugget Morpho? – Challenges.fr

Safran launches maneuvers. According to Le Figaro, the French aerospace group just start the process of selling its subsidiary Morpho security (1.9 billion euros turnover, 8,600 employees). The battle for the takeover of the French technological nugget looks Homeric, both candidates are jostling at the gate: besides industrial Atos, Gemalto, Oberthur or NEC, the Eurazeo fund Astorg, PAI, KKR, CVC, Apollo and Carlyle would also in the starting blocks, the newspaper said. Tenders must be submitted “during the second half of June.” . Safran CEO Philippe Petitcolin hope at least two billion euros of the transaction

For Safran, it’s a page is turned: the diversification of the group, historically present in engines equipment and aircraft and defense, to the booming security industry. Anxious to rebalance the group to make it less dependent on the aerospace cycles, the former CEO Jean-Paul Herteman had invested two billion dollars between 2008 and 2011, the redemption chip technology in the security sector: the American champion of biometrics L-1, the subsidiary of Motorola Printrak, or a subsidiary of General Electric, GE Homeland Protection, a specialist in explosives detection systems.

Focus on aviation

Alas, the market has not taken off as the French champion wished. The activity Security weighs just over 10% of the turnover of the group, against 20% expected initially. “The idea was to create a counterbalance to the aviation activities, but you do not do such a pendulum with an activity that only represents 10% of group weight”, explained last March in Petitcolin Challenges Philip, CEO of Safran. Who has decided to refocus the group on its historical business lines: aircraft and helicopter engines, landing gear, brakes, wiring, engine nacelles and defense, inherited from the former Sagem .

the sale of Morpho is far from unanimous, however. Among employees of all, who do not understand that the safety output even though the market is taking off. “Separating from Morpho is a mistake, warned Gerard Mardin, CFE-CGC coordinator of the group in March. Security is a very profitable business, which we are the world leader, as in biometrics.” Indeed, the profitability of Morpho (8% operating margin in 2015) without reaching the motors (19.7%), tu those aircraft equipment (9.4%), and ahead of the defense activities (5 ., 1%)

FBI historic Supplier

Most importantly, Morpho is a technological nugget: the division is the world leader in secure ID documents, world leader in technologies biometric identification, world number three chip cards. The group displayed remarkable references in all its activities the group is a historical supplier FBI for several biometrics (iris, fingerprints, facial recognition). It publishes 80% of US drivers license. He is also in charge of the giant Aadhaar program in India, which aims to give a unique identity number to 1.3 billion Indian citizens. Morpho is also a supplier of French security forces, with its rapid passage system to PARAFE borders or fingerprint detection systems for the police.

Some elected as the member of the LR Yvelines, Jacques Myard, the sale of this activity is therefore a sort of industrial treason. The elected interpellait the Minister of Defense Jean-Yves Le Drian to the National Assembly on April 6: “Will you oppose selling off those that take place in defiance of our independence and our interests?” Jean-Yves Le Drian was kicked into touch, noting that Morpho will “not part of the perimeter defense,” and that the company had not yet sold.

Morpho strategic for France?

in fact, the Morpho strategic character for France can debate. The company, if it works with the police, not the supplier of the French armed forces. And even with the Interior Ministry, the activity is limited to France, of the order of twenty million per year against several hundred million with the United States. “Under these conditions, difficult to weigh that Morpho rest French, especially with successive divestments of state capital of Safran,” said one expert dossier.

By forcing a little respect, one could say that the company is more American than French. Part of its operations in the US, the more strategic (Secure Driver License, in particular), is managed under the American system called “proxy”. Basically, the management of these trades should be delegated to administrators from a list of profiles approved by the US government. If well owner of the company, Safran therefore does not have a free hand to do as it pleases. The CEO of Safran Philippe Petitcolin is well placed to know: it was he who, until July 2015, headed the division Morpho

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