General Electric is expected to strike a deal to buy the Italian aerospace company Avio for $4 billion or more, in a bid to bolster its commercial jet engine business.
The deal between G.E. and Avio's owner, the British private equity firm Cinven, is expected to come together this week, according to a person with knowledge of the discussions who spoke on condition of anonymity because the talks were private. The person cautioned that the transaction might still fall apart.
Cinven bought a majority stake in Avio in 2006 from the Carlyle Group and Finmeccanica, in a deal valued at more than $3.3 billion. At the time, the private equity firm trumpeted Avio's technology and its partnership with top industry players like G.E. and Pratt & Whitney. The company had more than 4,800 employees with annual revenue of $1.8 billion.
Cinven wanted to take Avio public this year. But the private equit y firm shelved the plans amid the weakness in the European market for initial public offerings, according to the person.
Several players had taken a look at Avio. A group of investors including CVC Capital Partners had been in talks with Avio, according to Reuters.
Avio is a natural fit in G.E.'s portfolio. The two companies have had a relationship since the 1960s. The Italian jet parts manufacturer currently works with G.E. on a number of major projects, including an engine for the Boeing 787 Dreamliner and one for the Boeing 777.
The negotiations have been on and off since G.E. first expressed interest in a deal last year. The American company is now finalizing a bid to buy Avio for more than 3 billion euros, or $4 billion. News of the deal was previously reported by The Wall Street Journal.
A representative for G.E. could not immediately be reached for comment. A spokeswoman for Cinven declined to comment.
Michael J. de la Merced contributed reporting.
