L-3 Communications is teaming with Thales Avionics to operate L-3's Aviation Communications & Surveillance Systems assets, including the TCAS products that were spun off from Honeywell when Honeywell merged with AlliedSignal one year ago.

The companies have agreed to form a joint venture, to be dubbed ACSS, owned 70% by L-3 and 30% by Thales, which is investing approximately $72 million in cash. ACSS will be based in Phoenix, Arizona, "with marketing and support personnel stationed around the world." It will be run by L-3.

"We believe this is a win-win situation for both companies," said L-3 chairman and CEO Frank Lanza. "The global segment of this business is poised for substantial growth as more airlines move to meet upcoming mandates," he said.

"The presence of Thales should reinforce sales for both companies," said Thales chairman and CEO Francois Lureau. "Aviation surveillance products offer a vast field of opportunities which Thales and L-3 are uniquely positioned to meet," he said.

L-3 offers a family of Mode S transponders and Traffic Alert and Collision Avoidance System products. There are about 8,000 of the company's TCAS units in service in corporate and other aircraft.

L-3 says it "will benefit from Thales Avionics' extensive marketing and sales experience in the worldwide aviation marketplace to accelerate revenue growth." Thales in turn gets better access to the U.S. market.

The combined company will be better poised to develop new surveillance and communications products, Lanza said.
The deal is subject to regulatory approval.