LONDON (Reuters) -French aerospace group Safran said on Friday it had made a cash offer to buy the actuation and flight control business of Collins Aerospace in a deal valuing it at $1.8 billion to become a leader in certain critical cockpit functions.
Safran said the purchase would have an accretive impact on earnings per share from year one.
“The transaction would enable us to deliver a comprehensive offering to our clients and position us extremely well for next-generation platforms as the segments move toward increased electrification”, Chief Executive Officer Olivier Andriès said in a statement.
Actuators convert electronic instructions from the cockpit to the physical movement of parts to control the aircraft and have become an increasingly important area as airplanes become more computerised.
Collins Aerospace is one of the world’s largest aerospace suppliers and is part of Raytheon Technologies, recently renamed RTX.
The proposed purchase is expected to generate approximately $50 million of annual pre-tax run-rate cost synergies, which would be progressively implemented from 2025 to 2028.
As part of the proposed deal, long-term supply agreements would be secured between Safran and Collins at attractive terms, Safran said.
It said the closing of the deal is expected in the second half of 2024 and it is to be fully financed with available cash, with a limited impact on the Safran’s net leverage.
(Reporting by Augustin Turpin; Editing by Jan Harvey and Jane Merriman)
