The sale, through a placement of shares with qualified investors on the international market, was expected to generate between 530 million and 580 million euros (571 million to 625 million dollars), the bank, which is managing the deal with Credit Suisse First Boston, said.

Groupe Industriel Marcel Dassault, which owns 45.22 percent of Dassault Systemes, will waive its pre-emption rights on the state holding, Societe Generale said.

Shares in Dassault Systemes surged three percent to 3.66 euros in opening trading while the CAC 40 index of leading French stocks gained 0.96 percent.

The French Economy Ministry said the proceeds from the operation would be used against the debt of state-owned Reseau Ferre de France, which owns France's rail infrastructure.

A ministry official said: "This operation had been planned for a long time. We were simply waiting for favourable market conditions to do it."

The French government has plans to step up privatisations but also has had to bail out several troubled French companies through costly rescue packages.

SPACE.WIRE