Police swooped on the apartment building in Saint-Priest, in the suburbs of the city of Lyon, just hours after the 30-year-old delivery driver was arrested on suspicion of writing Arabic slogans on his employer's severed head and hanging it on a fence outside the nearby headquarters of Air Products.
Salhi is accused of going on to crash his Ford Fusion delivery van through the factory's gates before ramming it into several large gas cannisters left in the car park - apparently in the hope they would explode and destroy the entire factory complex.
The explosions were relatively small, however, leaving just two factory workers with non life-threatening injuries.
The murdered man - who French media say owned the delivery company Salhi worked for - is believed to have been killed elsewhere before his corpse was dumped at the factory site in Saint-Quentin-Fallavier and his head impaled on a fence 30 feet away surrounded by homemade Islamist flags.
Speaking before the raid on her home, Salhi's wife described her husband as a 'normal Muslim' who left for work as usual at 7am this morning. 'My heart stopped when I heard he was a suspect....I expected him this afternoon,' the unnamed woman told French radio station Europe 1.
Salhi - who is understood to have been known to security services since at least 2006 - reportedly told arresting officers that he is a member of the Islamic State terror group. He is believed not to have a criminal record and an investigation into his 'possible radicalisation' was dropped in 2008.
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