Swiss company RUAG International is set to sell its simulation and training business (RUAG S&T) to Thales.
The two companies have entered exclusive negotiations regarding the potential deal.
RUAG S&T offers simulation and training systems to armed forces and security organisations. The business has a workforce of around 500 people in four countries.
In 2021, the business is expected to generate sales of $97.56m (€86m).
The divestment of RUAG S&T is associated with the restructuring of RUAG International, which is set to become a space company.
RUAG International CEO André Wall said: “This is an exciting step not only for the RUAG S&T and all its employees and customers but for RUAG International as a whole. It brings us an important step closer to our goal of becoming a pure space company.”
According to a company statement, Thales intends to acquire all RUAG S&T business activities. All RUAG S&T employees will also move under new ownership.
The deal will complement Thales’ existing Training & Simulation business (Thales T&S), which develops training capabilities for armed forces, government and civilian helicopter operators.
RUAG S&T presence in Switzerland, France, Germany and the UAE will expand Thales T&S’ international footprint.
Currently, Thales T&S has industrial sites in France, the UK, Germany and Australia, as well as joint ventures in the US and other regions.
It is also expected to enhance Thales’ relationship with the Swiss Army and enhance its capabilities in training and simulation for land forces.
Thales executive vice-president Yannick Assouad said: “The training and simulation market is growing and increasingly digital. Greater use of simulation from concept definition to operations increases effectiveness and helps live training to address cost and environmental challenges.
“With this project, Thales strengthens the digitisation and European footprint of its training and simulation activity to support its customers’ ambitions in an ever more complex world.”
Both companies will consult their respective employee representative bodies regarding the project.
The deal is expected to close next year, subject to regulatory approvals.