GE to acquire aviation business of Avio S.p.A

GE has agreed to purchase the aviation business of Avio S.p.A., an Italy-based manufacturer of aviation propulsion components and systems for civil and military aircraft, for US$4.3bn (€3.3 bn). GE plans to acquire Avio’s aviation business from Cinven, a leading European private equity firm that has owned Avio since 2006, and Finmeccanica, the Italian aerospace group. The transaction is subject to regulatory and governmental approvals. GE will not be purchasing Avio’s space unit. The acquisition of Avio’s aviation business, which provides components for GE Aviation and other engine companies, would further GE’s participation in jet propulsion, one of the most attractive sectors of the aviation industry. Avio will strengthen GE’s global supply chain capabilities as its engine production rates continue to rise to meet growing customer demand. Avio and its customers will benefit from GE’s planned investment in expanding Avio’s products and services. Additionally, GE sees excellent opportunity in the acquisition of Avio related to margin expansion. Founded in 1908 and headquartered in Turin, Italy, Avio operates in four continents and employs about 5,300 people, 4,500 of whom are in Italy, including approximately 800 in the space unit. In the jet propulsion industry, Avio is a provider of low-pressure turbine systems, accessory gearboxes, geared systems, combustors and other components. Avio’s 2011 revenues in the aviation sector were €1.7 bn (US$2.4 bn) with more than 50% of that revenue derived from components for GE and GE joint venture engines.