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 gilles.castonguay@dowjones.com
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