By Gilles Castonguay
MILAN--U.S. conglomerate General Electric Co (GE) Friday said it has agreed to buy the aeronautics unit of Italian engine-maker Avio SpA, paying 3.3 billion euros ($4.4 billion) to private equity firm Cinven and Finmeccanica SpA (FNC.MI).
"The acquisition of Avio's aviation business, which provides components for GE Aviation and other engine companies, would further GE's participation in jet propulsion," GE said in a statement.
The price amounts to 8.5 times this year's earnings before interest, taxes, depreciation and amortization of the acquired business, GE said.
Avio makes components for commercial and military jet engines as well as propulsion systems for satellite launch vehicles. Most of its commercial business is done with GE.
Avio's space business will remain with the rump company, whose ownership won't change in the short term, Avio Chief Executive Francsco Caio said.
Cinven owned 81% of Avio while Finmeccanica, a state-controlled Italian defense-and-engineering conglomerate, owns 15%.
GE's deal ends a long-running saga during which Turin-based Avio, formerly owned by Fiat SpA (F.MI), contemplated an initial public offering and was courted by several other offers from international buyers.
Write to Gilles Castonguay at [email protected]
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