Safran has announced its contemplated acquisition of Collins Aerospace's high-technology actuation and flight control activities, which are mission critical for commercial and military aircraft and helicopters. The business has approximately 3,700 employees across eight facilities in Europe (France, UK and Italy) and in Asia, and also benefits from MRO and engineering capabilities. It is expected to generate sales of approximately US$1.5 billion and an EBITDA of US$130 million in 2024.
Olivier Andriès, Chief Executive Officer of Safran, commented: “The contemplated transaction represents a unique opportunity to develop our position in mission critical actuation and flight control functions. Our highly complementary product offerings would create a global leader in these segments with around US$1.8 billion of sales. 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 toward increased electrification. The business is a perfect fit with both our product portfolio and our DNA with leading technologies, recurring aftermarket sales, and profitable growth. ”
It is expected the transaction will generate approximately US$50 million of annual pre-tax run-rate cost synergies, which would be progressively implemented from 2025 to 2028. Such synergies would notably come from economies of scale in procurement, R&D complementarity, internalisation of sourcing and production flows. In addition, commercial synergies would be obtained through integrated offerings and a diversification of customers and geographic mix. Commercial synergies would continue post 2028 with run-rate achieved on next-generation aircraft by the middle of the next decade.
Key strategic benefits of this transaction for Safran include: Highly complementary product offerings creating a leading player (~US$1.8 billion combined sales in 2024E) with an end-to-end product portfolio. Synergetic exposure across commercial, military aircraft and helicopter segments, with strong legacy programs. Complementary capabilities in hydraulic and electromechanical actuation positioning Safran well for next-generation aircraft. Attractive exposure to valuable and recurring aftermarket revenue streams and compelling value creation supported by short-medium-term cost synergy potential. (£1.00 = US$1.29 at time of publication.)
