By Cyril Altmeyer
PARIS (Reuters) - Departing Thales Chief Executive Jean-Bernard Levy will be replaced by a non-executive chairman from outside Europe's largest defense electronics company and a CEO chosen from within the group, a source close to the matter told Reuters.
The source said a new CEO would be chosen by Dassault Aviation, the company's core industrial shareholder with a 25 percent stake, while the chairman would be chosen by the French state, which holds 26 percent.
"An agreement has been reached," the source said on Friday.
Thales is due to hold a board meeting at 11 a.m. EST on Monday to decide on Levy's succession, after he was named by the government last month to replace the ousted head of state-controlled EDF, two other sources close to the matter said.
He is expected to start his new role at the power utility on Nov. 23.
A spokesman for Thales had no immediate comment. Dassault was not immediately reachable for comment. The finance ministry declined to comment.
Levy, who took charge of Thales less than two years ago, has been credited with easing internal tensions following the reign of his predecessor, Jean-Luc Vigneron.
External candidates to replace him include Antoine Bouvier, chief executive for the past seven years at MBDA, a missile maker owned by Airbus Group, BAE Systems and Finmeccanica.
Another name which has been floated is Jean-Francois Cirelli, outgoing number two at GDF Suez, several people familiar with the matter have said.
In-house contenders include Chief Operating Officer Patrice Caine, who has the backing of France's state participation agency, and Pierre-Eric Pommellet, who is in charge of defense mission systems and is closer to Dassault, according to the sources.
(Writing by by Alexandria Sage; Editing by Jane Merriman and David Holmes)