PARIS, Feb. 7 -- Alcatel and Finmeccanica, an Italian high-tech company, have signed a final agreement to merge their space activities by creating two joint venture companies to which both partners will contribute their respective satellite industrial and service activities. The first company, Alcatel Alenia Space, of which Alcatel will own 67 percent and Finmeccanica 33 percent, will combine Alcatel Space and Alenia Spazio's activities. It will focus on the design, development and manufacturing of space systems, satellites, payloads, instruments and associated ground systems for civilian and military applications. Alcatel Alenia Space will be based in France, with plants in France, Italy, Belgium and Spain. The second company, Telespazio, of which Finmeccanica will hold 67 percent and Alcatel 33 percent, will combine Telespazio with Alcatel Space Services and Operations activities. It will focuse on satellite solutions, including control and exploitation of space systems as well as value-added services for networking, multimedia and earth observation. It will be located in Italy, with plants in Italy, France and Germany. The companies said consolidating the space units will improve their operating profitability by several points, which will be realized progressively, in line with business cycles. The management team for each company will be appointed in the coming weeks. The closing is expected during 2005, subject to approval by regulatory authorities. For more information, visit: www.alcatel.com