By Robert Wall 

LONDON--French aerospace supplier Safran SA said Thursday it had agreed to buy Zodiac Aerospace in a deal that values the beleaguered French plane cabin interiors specialist at EUR8.5 billion ($9 billion).

The two companies said Safran would create the world's No. 3 aerospace supplier with a combined EUR21 billion in shares.

Safran would pay EUR29.47 a Zodiac Share. Investors would receive 0.485 Safran shares for each Zodiac share excluding a EUR5.5 a share special dividend to be paid before closing. Zodiac shares closed Wednesday at EUR23.31.

Both boards back the deal that still requires shareholder approval and that from regulators.

The move comes only three months after Rockwell Collins Inc. agreed to pay $6.4 billion to buy Zodiac's chief rival B/E Aerospace Inc. in a deal that would unite two of the biggest suppliers to airlines and plane makers.

The world's largest plane makers Boeing Co. and Airbus SE are putting increased pressure on their suppliers for discounts as they seek to win orders from airlines for their new planes by offering lower prices. That has caused suppliers to seek greater scale to gain efficiencies.

Safran and Zodiac said the combination of the two French companies would generate at least EUR200 million in annual pretax savings. Half of those would be generated in the first year, the companies said.

Safran chairman Ross McInnes said the deal underpinned the company's plan to bolster its aerospace activities.

Safran, a maker of everything form plane wiring to aircraft engines, has long had interest in acquiring the smaller French aircraft supplier. Zodiac in 2010 rejected a takeover proposal from Safran.

The renewed takeover plan comes after a turbulent period for Zodiac. The company fell behind on providing seats to airlines for Boeing and Airbus jets, angering customers, delaying plane deliveries, and causing some carriers to seek new suppliers. Airbus also publicly chastised Zodiac for late delivery of plane toilet components for the European plane maker's new A350 long-range jet.

Shares in Zodiac had declined more than 10% over the past two years despite record plane deliveries during the period.

Write to Robert Wall at robert.wall@wsj.com

(END) Dow Jones Newswires

January 19, 2017 01:49 ET (06:49 GMT)