PARIS — French electronics company Thales expects Lockheed Martin to pick a supplier of an acoustic suite of sonar equipment for an Australian program early next year, while the U.S. firm has told Defense News the contract will be awarded this year.

“I expect a selection, a contract, by Lockheed Martin and validated by the Commonwealth (of Australia) probably not before the end of the year," Thales Chairman and CEO Patrice Caine said March 6 at a media conference on 2017 financial results. "We could say early in 2019."

Thales is “in discussion” with Lockheed, according to the executive.

Those talks are related to a competition held by Lockheed for sonars and other equipment. The Australian government selected the U.S. company as its combat system integrator for the AU$50 billion (U.S. $39 billion) program in which France’s Naval Group is designing, building and servicing 12 diesel-electric boats.

Thales hopes to win the sonar selection, which is expected to generate sales worth €1 billion (U.S. $1.2 billion) for its Australian subsidiary.

In following up on Caine’s estimate, Lockheed Martin Australia told Defense News a contract is expected later this year. The company noted that a selection of sonar arrays is on schedule and a request for quote was sent last week to industry.

The company declined to give a value on the contract, as the competitive process is still underway.

Australia and France are major markets for Thales as the two nations plan to boost their respective defense budgets for the coming years, signaling a return to “significant” increases in mature markets, Caine said.

That boost in spending reflects geopolitical tension and security threats. Australia plans to increase domestic defense spending and aims to be one of the top 10 arms exporters.

France seeks to boost capabilities in intelligence gathering, innovation and digital systems — key industrial areas for Thales, the executive noted.