President Hollande yesterday hailed the €8.5 billion deal between Safran, the engine-maker, and Zodiac, the aircraft seat manufacturer, to form the world’s third largest aerospace supplier.
The move allayed fears in Paris that Zodiac could fall into foreign hands amid a crisis marked by its failure to deliver products on time to the world’s big aircraft makers.
The presidency said that Mr Hollande “salutes this beautiful industrial operation which reinforces the French aeronautic industry”.
The merger comes with Airbus and Boeing demanding consolidation among suppliers as they seek to increase production to meet record orders worldwide.
Zodiac rebuffed a takeover bid from Safran in 2010 but after a series of profit warnings accepted the latest offer. Olivier Zarrouati, the chairman, said that he was excited by the prospect of joining Safran.
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The takeover comes after Zodiac was criticised by Boeing over the supply of seats and by Airbus, whose A350 planes have been delayed by the firm’s inability to make toilets on time.
Philippe Petitcolin, the managing director of Safran, which made a profit of €1.48 billion last year, compared with €108 million for Zodiac, brushed aside concern that he was taking on a lame duck. “Our industrial expertise will hasten the return of Zodiac Aerospace to its historic profit levels,” he said.
Mr Petitcolin insisted that his teams would remain focused on the development of its new LEAP engines, which follow the bestselling CFM 56 that it makes with General Electric. Under the deal, which is designed to protect the Domange and Maréchal families that control Zodiac, Safran will launch a cash offer worth €29.47 per share, valuing Zodiac at €8.5 billion, a 26 per cent premium on Wednesday’s closing price.
Mr Hollande said that the French state, which holds a 14 per cent stake in Safran, will remain the biggest shareholder with about 10 per cent.
The company, which will continue to be called Safran, will be headed by Mr Petitcolin with Mr Zarrouati as his deputy.
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Ross McInnes, the Franco-Australian businessman leading an attempt by the French authorities to woo financial firms from London to Paris after Brexit, will remain as chairman of Safran’s board.