General Electric is close to signing a deal to buy Avio SpA, an
Italian aerospace firm, for about $4 billion, sources told The Wall
Street Journal.
The deal, which is expected to be announced Thursday, is not finalized. As such, there is a chance it will not go through.
One outstanding issue yet to be resolved is how to carve Avio's space
business out of the acquisition. Avio, 81 percent of which is owned by
the private equity firm Cinven, makes both commercial and military jet
engines and propulsion systems for satellites. But GE is not seeking to
buy the space operations end of Avio's business, the Journal said.
GE is already responsible for about two-thirds of Avio's contracts, which explains why GE is interested in the purchase.
GE is expecting a large increase in jet engine orders in the next
five years and is working to ensure it has an uninterrupted supply
chain.
Avio employs 5,200 workers and last year had sales of $2.6 billion, a 16 percent increase over 2010.
source: upi.com
