ROME — General Electric has agreed to buy the aviation business of Italy’s Avio for $4.3 billion, GE announced Dec. 21.
Avio is controlled by private equity fund Cinven, which has sought to sell its stake. A further 14.3 percent is owned by Italy’s Finmeccanica.
GE will not take over Avio’s strategic space business, which will continue to be controlled by Cinven, with Finmeccanica holding a 14.3 percent stake.
The space activities, which saw revenue of 300 million euros in 2011, are primarily linked to the Ariane 5 and Vega launchers.
The GE deal follows interest from France’s Safran in buying Avio, which had raised objections from Italian politicians.
Avio manufactures components for the Eurofighter Typhoon and the Airbus A400M airlifter, as well as for Boeing and Airbus civil jets.
Finmeccanica said it would use the 260 million euros proceeds from the sale to lower its debt. The firm has sought to cut debt by 1 billion euros this year and is still mulling plans to sell its stake in civil unit Ansaldo Energia.
Avio’s 2011 revenue was 1.7 billion euros.
A planned initial public offering for Avio was canceled this year due to poor market conditions.
“The transaction has a significant financial and industrial relevance,” said Finmeccanica CEO Giuseppe Orsi. “On one hand, it represents an important first step in the announced divestiture plan; on the other, it allows Finmeccanica to evaluate its presence in the space activities of Avio S.p.A. and to make, over time, its determinations on the matter.”