Safran in merge talks with Zodiac Aerospace; several Mexican plants are in the deal

23 January, 2017

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Zodiac Aerospace announced to have entered into negotiations for an acquisition by Safran. Several manufacturing, engineering and MRO Mexican facilities are involved in the deal.

According to a press release, the agreed public offer sees EUR 29.47 per share (US$ 31.66 at today’s exchange rate) and a subsequent merger on the basis of 0.485 Safran shares for one Zodiac Aerospace share.

The new entity would combine Safran's capabilities in landing gear, wheels and brakes, nacelles, power systems, actuation and avionics, with Zodiac Aerospace's in the segments seats, cabin interiors, power distribution, lighting, fuel, oxygen and fluid systems and safety equipment.

In electrical systems, Zodiac Aerospace's assets would reinforce Safran's portfolio of technologies and position the group ideally for future developments towards the "more electrical aircraft".

Zodiac owns two manufacturing plants in Mexico, located in the cities of Chihuahua and Tijuana, while Safran operates a MRO (Maintenance, Repair and Overhaul) facility in Queretaro, manufacturing sites in Chihuahua, Queretaro and Mexico City and a Research and Development center in Chihuahua.

The combined group would form the third largest player worldwide in the aerospace sector with 92,000 employees and about US$ 22.78 billion in revenues.

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. We are delighted to participate in the combination of two leaders of the industry with complementary positions and strong innovation abilities dedicated to their customers."

Philippe Petitcolin, CEO of Safran, said: "The acquisition of Zodiac Aerospace represents a unique opportunity at this point in Safran's development, just a few months after initiating the refocus of the group on our core activities of Aerospace and Defense. The technological complementarities will ensure that we accelerate domains as strategic as critical systems and the more electrical aircraft, which make up 40% of Zodiac Aerospace's activities."

The approbation of the merge will be subject to the approval of Safran's and Zodiac Aerospace's shareholders and regulatory authorities. Completion of the tender offer is expected by the end of the 4th quarter 2017 and the merger is expected to be complete in early 2018.

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