Embattled equipment firm Alcatel-Lucent said Tuesday it has entered into exclusive discussions with Dassault Aviation, over the offloading of its 20.8 per cent stake in French defence firm Thales.

Dassault, which makes both civil and military aircraft, is also in discussions with the French government, which maintains a 27 per cent stake in the defence firm, over the proposed scope of their partnership as shareholders in Thales.

If it goes ahead, the deal could be worth up to Eur1.5bn for Alcatel-Lucent.

Last month, the monster telecoms vendor appeared to be in better shape, shrinking its third quarter net loss to Eur38m, compared to a loss of Eur318m in the same period last year.

Revenues dropped 6.6 per cent to Eur4bn, compared to Eur4.3bn last year, as carrier equipment sales fell.

The company’s Carrier division reported revenues down 13 per cent year on year to Eur2.7bn, while the Enterprise unit sales were up 2.2 per cent to Eur288m and Services revenues were up 12 per cent to Eur870m.