Safran acquires Collins Aerospace for $1.8 billion

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The French aeronautical equipment supplier Saffron announced yesterday the planned acquisition of flight actuation and control activities from the american Collins Aerospace For $1.8 billion.

A subsidiary of the American giant Raytheon Technologies, Collins Aerospace is a company specializing in mechanical systems, interior equipment, avionics and aerostructures. The proposed transaction is first subject to the information and consultation procedure of the employee representative bodies concerned at Collins and Safran, as well as to obtaining regulatory authorizations and other customary conditions. It should be finalized during the second half of 2024.

The contemplated transaction represents a unique opportunity to develop our position in critical actuation and flight control functions. Our highly complementary products would create a world leader in these market segments, generating sales of approximately $1.8 billion. This operation would allow us to offer a complete offer to our customers and would place us in an excellent position on the next generation of platforms in a context of increasing electrification of functions. This activity is perfectly consistent with our product portfolio and our DNA: advanced technologies, recurring service activities and profitable growth. said Olivier Andriès, CEO of Safran.

According to the French equipment manufacturer, the main strategic advantages of this transaction are as follows:
-A highly complementary product offering giving rise to one of the industry leaders (combined revenue of c.$1.8bn in 2024E) and benefiting from a comprehensive portfolio – Collins’ actuation and flight controls business would provide Safran with a full range of skills and products, making the Group a leading player with an extensive portfolio of actuation and flight controls products;

– Significant potential for synergies between the different market segments (commercial and military aircraft, helicopters) with strong existing programs – These additional capacities would provide Safran with a balanced exposure between the different customer segments and product categories, as well as a favorable positioning between mature and growing platforms;

-Complementary skills in hydraulic and electromechanical actuation, giving Safran a favorable position for the next generation of aircraft – Collins’ leading skills in hydraulic and mechanical actuation would combine with Safran’s know-how in electric actuation, as well as in electronics, and thus give the Group an advantage on future aeronautical programs;

– Interesting potential for recurring revenue in services activities – Around 40% of revenue comes from services activities, which generate particularly profitable revenues, and would strengthen the share of services in Safran’s activities;

-Significant value creation thanks to the potential for short- and medium-term cost synergies – Clearly identified sources of cost synergies, associated with possible additional commercial synergies.

John Walker Avatar