How GE Got the Thumbs Up For Avio Aviation Acquisition
The European Commission has approved General Electric Co.’s (NYSE:GE) $4.3 billion purchase of the aviation business Avio S.p.A. after assuring the acquisition would not interfere with Avio’s involvement in the European jet fighter project (Eurojet).
Avio, an Italy-based manufacturer of aviation propulsion components and systems for civil and military aircraft, is a key contributor to the consortium working on the Eurojet project. Following GE’s announcement in December last year to purchase Avio, the commission’s antitrust authority voiced concerns the purchase could be viewed as “a conflict of interest,” considering both GE and Avio manufacture engines for fighter jets. “GE has made commitments to protect consortium information and to ensure Eurojet and Eurofighter can continue to participate in future campaigns for export sales,” the European Commission said in a statement on Tuesday.
The European Commission approved the deal on the condition that GE follows through on the agreement.
GE purchased Avio from Cinven, a leading European private equity firm that has owned Avio since 2006, and Finmeccanica, an Italian aerospace group. The acquisition of Avio’s aviation business, which provides components for GE Aviation and other engine companies, will further GE’s participation in jet propulsion, one of the most attractive sectors of the aviation industry. 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.