Thomson and Thales Announce Strategic Partnership and Potential Acquisition by Thomson of Thales Broadcast & Multimedia Business Unit

PARIS --(Business Wire)-- Dec. 12, 2005 -- Thomson (Euronext Paris:18453)(NYSE:TMS) and Thales today announced a strategic partnership as well as the potential acquisition by Thomson of Thales Broadcast & Multimedia (TBM).

Thomson and Thales will develop a partnership relationship specifically in the domain of high-value video content management and distribution solutions for in-flight entertainment, security, and defense applications, leveraging their respective skills and expertise in these domains.

Under this strategic partnership, Thomson would also acquire Thales Broadcast &Multimedia which provides platforms for IPTV services (TV services over Internet Protocol), video-on-demand, Mobile TV, and Digital TV and radio broadcasting systems and equipment. By combining the TBM activities with Thomson`s existing Systems & Equipment offerings, Thomson will be well positioned to offer end-to-end products and services, in particular in the fast-growing IPTV, Mobile TV and Digital terrestrial transmission (DTT) markets, with solutions encompassing every component of the video chain.

``The strategic agreement with Thales creates a powerful partnership for addressing the rapidly increasing demand across various markets for multidistribution access of video content,`` said Frank Dangeard, Chairman of CEO of Thomson. ``Furthermore, acquiring TBM will strengthen Thomson`s position in the high-growth IPTV and Mobile TV markets. It will reinforce our relationships with telecom operators and broadcasters and create value through tightly integrated, optimized and pre-packaged system solutions.``

``We are delighted by this partnership with Thomson. Thomson`s strategic priority and core business are in line with TBM`s leading edge technology and commercial potential. For Thales, divesting from these activities further optimizes its portfolio of businesses and strengthens its investment capability,`` said Denis Ranque, Chairman and CEO of the Thales group.

The acquisition is subject to finalization.

Certain statements in this press release, including any discussion of management expectations for future periods, constitute ``forward-looking statements`` within the meaning of the ``safe harbor`` of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on management`s current expectations and beliefs and are subject to a number of factors and uncertainties that could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements due to changes in global economic and business conditions, consumer electronics markets, and regulatory factors. More detailed information on the potential factors that could affect the financial results of Thomson is contained in filings with the U.S. Securities and Exchange Commission.

About Thomson -- Partner To the Media & Entertainment Industries

Thomson (Euronext Paris:18453)(NYSE:TMS) provides services, systems and technology to help its Media & Entertainment clients -- content creators, content distributors and users of its technology -- realize their business goals and optimize their performance in a rapidly changing technology environment. The Group is the preferred partner to the Media & Entertainment Industries through its Technicolor, Grass Valley, RCA, and Thomson brands. For more information: http://www.thomson.net.

Thomson`s Systems and Equipment division develops video and film technologies, products and services sold to all major Hollywood studios, all major television, satellite, and cable broadcasters under the Grass Valley and Thomson brand-names for the delivery of analog and digital entertainment. The division also includes set-top boxes, telecommunications and connectivity businesses. For information about Grass Valley products from Thomson, please visit www.thomsongrassvalley.com.

About Thales

Thales is an international electronics and systems group, serving defense, aerospace, services and security markets. The Group employs 61,500 staff worldwide and generated revenues of EUR 10.3 billion in 2004. With industrial operations in almost 30 countries, Thales is an acknowledged world leader in advanced technologies.

About Thales Broadcast & Multimedia

Thales Broadcast & Multimedia, a wholly owned subsidiary of Thales (formerly Thomson-CSF) is a provider of broadcast products and systems supplier. Thales Broadcast & Multimedia designs , develops, manufactures and markets equipment, systems and solutions fields of terrestrial transmission (radio and TV), MPEG-2 digital video processing and multimedia distribution for broadcasting, cable TV, satellite and telecommunication service providers worldwide.

Thales Broadcast & Multimedia is organized into the following strategic business units:

Multimedia solutions include MPEG-2 digital video processing products and multimedia distribution systems such as: end-to-end broadband TV solutions for delivery of VOD content, MPEG test & monitoring solutions, electronic program guide integration solutions that enable operators to efficiently maximize their bandwidth utilization and create new customized services.

Digital Television Broadcast solutions include a complete line of digital and analog UHF and VHF, Solid State, and IOX transmission products. In addition to traditional TV broadcasting products, they are heavily involved in the new field of Mobile Media including DVB-H systems used for distribution of TV content to hand-held devices.

Thales also plays an important role in the international standardization process and supply of DRM (Digital Radio Mondiale) systems. For more regional information: www.thales-bm.com