Safran plans to acquire the actuation and flight control businesses of Collins Aerospace, the French aerospace group announced today. The company told analysts and investors it has made a cash offer based on a valuation of the Raytheon Technologies subsidiary of $1.8 billion.
According to Safran, the sale is subject to regulatory approval by financial authorities and consultation with employee groups at both companies. Safran indicated it does not expect to close what it described as a “contemplated” transaction until the second half of 2024.
“Collins Aerospace, an RTX business, regularly reviews its business portfolios to ensure the company is well positioned to meet customer requirements and drive long-term growth,” a Collins spokeswoman told AIN. “The divestiture of the Collins Aerospace Actuation Systems business will optimize resources and position Collins for future success as a business of the world’s largest aerospace and defense company.”
Collins’s actuation and flight control business units support a wide array of civil and military aircraft. The business has around 3,700 employees across eight sites in Europe and Asia. According to Safran’s statement, it is expected to generate around $1.5 billion in revenues next year and earnings in the region of $130 million.
In addition to its prominent aircraft engines business, Safran also produces a diverse portfolio of aircraft systems and interiors, which the proposed acquisition would supplement with mission-critical actuators and flight controls. “Our highly complementary product offerings would create a global leader in these segments with around $1.8 billion in sales,” commented Safran CEO Olivier Andriés. “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 towards electrification. The business is a perfect fit with both our product portfolio and our DNA with leading technologies, recurring aftermarket sales, and profitable growth.”
In recent years, both Collins and Safran have aspired to play a larger role as key systems suppliers for technology being developed for both the advanced air mobility sector and new commercial airliners. According to Safran, the acquisition could result in $50 million in annual cost savings between 2025 and 2028, due to economies of scale and in procurement, and by pooling research and development efforts and achieving production efficiencies. It expects further synergies to be achieved after 2028 leading to the delivery of new-generation aircraft by the mid-2030s.