(Adds CEO quote to paragraph 3, details paragraph 4 agreement)
LONDON, July 21 (Reuters) – French aerospace group Safran said on Friday it had made a cash offer to buy Collins Aerospace’s action and flight control business in a deal valued at 1.8 billion dollars to become a leader in critical cockpit functions.
Safran said the purchase would be accretive to earnings per share in the first year.
“The transaction would allow us to provide a comprehensive offering to our customers and position us extremely well for next-generation platforms as the segments move towards increased electrification,” Chief Executive Olivier Andriès said in a statement.
Actuators convert electronic instructions from the cockpit into physical movement of parts to control the aircraft and have become an increasingly important area as aircraft become more computerized.
Collins Aerospace is one of the largest aerospace providers in the world and is part of Raytheon Technologies, recently renamed RTX.
The proposed purchase is expected to generate approximately $50 million in pretax annual cost synergies, which would be phased in from 2025 through 2028.
Under the proposed agreement, long-term supply agreements would be entered into between Safran and Collins on attractive terms, Safran said.
He indicated that the closing of the transaction is expected in the second half of 2024 and that it will be entirely financed by available cash, with a limited impact on Safran’s net debt. (Reporting by Augustin Turpin; Editing by Jan Harvey and Jane Merriman)