General Electric to Buy Avio for $4.3 Billion

LONDON â€" General Electric agreed on Friday to buy the Italian aerospace company Avio for $4.3 billion, acquiring a long-time partner in its jet engine business.

G.E. and Avio have deep ties. Avio has been supplying components to the American conglomerate since 1984, and more than half of last year's revenues in the aviation sector came from selling engine components to G.E.

Now, G.E. hopes to tap Avio's expertise for other industries. The conglomerate said it planned to create “additional opportunities to offer Avio's products and services beyond the aviation industry” and that it would “pursue new opportunities for Avio in power-generation, oil and marine products.”

“This acquisition is a great strategic fit with our existing portfolio,” David Joyce, president and chief executive o f GE Aviation, a G.E. unit, said in a statement. “Avio has technologies, capabilities and outstanding engineers to help grow our business.”

G.E. is buying Avio from Cinven, the British private equity firm, which acquired the company in 2006 for 2.57 billion euros, or $3.4 billion. After the purchase, Cinven installed a new chief executive and started a broad investment program in research and development.

Cinven moved to take the company public. But the private equity firm shelved the plan amid the doldrums of the markets, according to a person briefed on the plan.

Several companies had approached Cinven about Avio, with G.E. eventually emerging as the front-runner. The purchase price for Avio is about 8.5 times Avio's estimated 2012 earnings before interest, taxes, depreciation and amortizat ion, G.E. said.

A version of this article appeared in print on 12/22/2012, on page B2 of the NewYork edition with the headline: G.E. To Buy Italian Aerospace Company For $4.3. Billion.