Without citing sources, the weekly French business and politics newsletter La Lettre de l'Expansion said Finance Minister Francis Mer had recently sent a letter to EADS co-chief executive Philippe Camus and Alcatel chairman Serge Tchuruk encouraging a merger, which was "seriously being studied".

Speaking about the possibility of a merger, Camus later told French radio channel BFM: "It's a subject that's being talked about." However, he said he had not been informed of the letter.

"I have made a certain number of propositions to Serge Tchuruk and I informed Francis Mer of them," he said, adding that the right conditions and the right price was necessary.

Alcatel and the finance ministry declined to comment on the report.

The report said a tie-up could also be joined by Alenia Aerospazio, a unit of Italian defence group Finameccanica, in the summer.

SPACE.WIRE