French giants Safran group and Zodiac Aerospace held a joint press conference on Thursday in central Paris to announce a merger that would create the world’s second largest supplier of aircraft equipment, after America’s United Technologies Corporation (UTC).
Safran group announced it has begun exclusive negotiations for a friendly takeover of Zodiac, the aircraft seats supplier. The merger, worth nearly €10 billion, would make the new group the world’s third largest aerospace group by revenue, excluding aircraft manufacturers like Boeing and Airbus. The groups’ executives welcomed the creation of a new European champion.
Safran first attempted to strike a deal with Zodiac Aerospace back in 2010, but it refused a formal bid, commenting at the time that there would be limited benefits from such a merger. Today, Oliver Zarrouati, chairman of Zodiac Aerospace, has clearly changed his mind. The decision comes after crossing a zone of turbulence. The French jet interiors supplier has been the subject of speculations for months since issuing a series of profit warnings.
Finalisation of the public offer is expected for late 2017, with a final merger complete in early 2018. The French government, a majority shareholder in Safran group, backs the operation. The combined group will employ about 92,000 staff around the world with an annual turnover of over €21 bn.
