PARIS — T hales Group’s purchase of Alcatel-Lucent’s majority share of Alcatel Alenia Space — and Alcatel-Lucent’s minority stake in Telespazio — creates a company that will preserve a French-Italian alliance in space-hardware and services and also strengthen the company’s position in ground- and space-based military systems.

As a result of Alcatel-Lucent’s sale of its 67 percent interest in Alcatel Alenia Space, the satellite prime contractor’s name will be changed to Thales Alenia Space, but little else will change, according to Paris-based Thales. The company’s management team, led by Pascale Sourisse, will remain.

The sale, first announced in April 2006, closed April 6 following approval of European Commission competition authorities, who had spent months investigating whether the combination of Thales with Alcatel Alenia Space would undermine competition in the market for satellite components known as traveling wave tube amplifiers.

The commission concluded that it would not.

Alcatel-Lucent and Thales also said April 6 that over the last 12 months the companies spent finalizing details and awaiting European regulatory approval , the terms of the sale were changed to make it more favorable to Alcatel-Lucent. In addition to selling its stake in satellite prime contractor Alcatel Alenia Space, Alcatel-Lucent also is selling its 33 percent ownership of Telespazio of Italy, which specializes in satellite ground services; and Alcatel-Lucent’s transportation and security activities. In exchange for these assets, Thales is paying Alcatel-Lucent 710 million euros ($950 million) in cash, instead of the 673 million price that was planned a year ago. Alcatel-Lucent also is receiving 25 million newly issued shares in Thales, thus increasing its equity stake in the company to 20.95 percent from 9.46 percent.

The French government remains the largest shareholder in Thales, whose core specialty is defense electronics. The government’s stake after the sale is 27.29 percent, after the dilution that resulted from issuing new shares to Alcatel-Lucent. Alcatel-Lucent said in an April 10 submission to the U.S. Securities and Exchange Commission (SEC) that Thales cash payment of 710 million euros includes 670 million euros for the satellite business.

Thales and Alcatel-Lucent agreed that an independent expert will be asked to determine a value for the space business in late 2008 or 2009.

“The amount of 670 million euros concerning the disposal of the space business is considered rather as a preliminary payment of the selling price (as an expert will establish the definitive price in 2009) and is therefore not entirely representative of the market price of this business,” Alcatel-Lucent said in its SEC filing. “It is one of the reasons why Alcatel-Lucent had no intention of disposing of the space business without including it in the larger transaction defined in the master agreement.”

Alcatel-Lucent said it expects to report a pretax capital gain of about 800 million euros as a result of the sale. The two companies agreed in April 2006 that if the independent assessment of the space division’s value concludes that the business is worth more than 760 million euros, Thales will pay Alcatel-Lucent half the difference.

Alcatel-Lucent spokeswoman Regine Coqueran said April 11 that this aspect of the agreement remains in place. Thales spokesman Markus Leutert said April 13 that Thales would not comment on whether the valuation threshold remains as described in 2006.

Leutert also would not confirm whether Thales still estimates that despite the complementary aspect of the two companies’ space operations, Thales will be able to realize cost-saving synergies of 50 million euros per year once it has eliminated duplication of functions.

Leutert repeated Thales’ earlier assessment that the purchase would add to Thales’ per-share profit “from the first year onwards.”

Since the April 2006, agreement between Alcatel-Lucent and Thales, Alcatel Alenia Space’s performance has improved. Sales in 2006 rose by 10 percent, to 1.65 billion euros, and the company expects to increase revenues by 10 percent annually for the next three years.

The effect of the Thales purchase on the global market for satellite tube amplifiers was the main concern of the European Commission.

Thales Electron Systems builds traveling wave tubes and is one of the two principal manufacturers active in the global market, the other being L3-ETI of the United States. Integrated traveling wave tube amplifier systems are sold by L3-ETI and Tesat Spacecom of Germany.

The commission concluded that the new company, Thales Alenia Space, would not have a market-dominating power even with the addition of Thales Electron Systems and a small electronic power amplifier business already maintained by Alcatel Alenia Space.

In its April 4 decision, the commission said Alcatel Alenia Space’s current power-amplifier business is not active in the market to provide dual-feed units capable of powering two traveling wave tubes.

Today’s market, the commission said, is moving toward dual-feed units, which already account for 50 percent of global commercial demand.

The commission also concluded that most satellite prime contractors order fully assembled tube amplifier systems instead of purchasing tubes and amplifiers separately.

“This merger creates a complex vertical structure in an industry involving highly technical products, but the commission has investigated it thoroughly and is satisfied that the existing strong competition on the market for telecommunications satellites and subsystems will not be adversely affected,” European Competition Commissioner Nellie Kroes said in an April 4 statement accompanying the commission’s decision.