"That would be a very good project, because it would give rise to synergies and allow the two companies to have a joint global presence," Mer told the business daily Handelsblatt.

"A rapprochement would create advantages for the companies, our countries, customers and Europe," Mer added

DCN, which is wholly owned by the French state, signalled on July 8 that it was examining whether a purchase of HDW, the world's leading maker of conventional submarines, might be interesting and did not rule out such a deal taking place.

It nevertheless refused to say whether corresponding talks were underway.

Mer said, however, that in order for a merger to come about, "the companies and our governments must have the same ideas about the project. After all, Germany is HDW's biggest customer."

WAR.WIRE