Safran to buy Zodiac Aerospace

Safran has agreed to buy Zodiac Aerospace for €8.5bn in a deal that will create the world’s third largest aerospace supplier.

Under the terms of the deal, Safran will pay €29.47 per Zodiac share, with investors receiving 0.485 Safran shares for each Zodiac share, excluding a €5.5 a share special dividend that will be paid before the deal closes.

On a pro-forma basis, including Safran’s propulsion business, the combined group would have around 92,000 employees, €21.2bn in adjusted revenues and €2.7bn in adjusted recurring operating income.

On this basis, the combined group would form the third largest player worldwide in the aerospace sector and the second largest player worldwide in aircraft equipment.

Ross McInnes, chairman of Safran's board of directors, said: “This planned acquisition is fully consistent with the strategy we clearly outlined almost a year ago at our Capital Markets Day, to bolster Safran's core aerospace activities with quality businesses which share our DNA: technology, tier-1 positions and recurring revenue streams.

“It will strengthen our position and create significant value through integration and synergies. The board of directors is unanimously supportive because it is favourable for Safran's shareholders, employees and partners.”

Didier Domange, chairman of Zodiac Aerospace's supervisory board, said: "The creation of this new global leader in the aerospace industry is led by a strong industrial rationale and a long term vision. The new group will be ideally positioned to support its clients in their ambitious programs for the future.”

At 0806 GMT, Safran shares were up 0.7% to €67.74 and Zodiac shares were 21% higher at €28.26.