Boeing and Safran have agreed to jointly design, build and service Auxiliary Power Units (APUs), creating better value for customers and for both companies. The new joint venture will leverage capabilities of two aerospace leaders to combine the best technologies and services for customers.
“This strategic partnership will leverage Boeing’s deep customer and airplane knowledge along with Safran’s experience in designing and producing complex propulsion assemblies to deliver expanded, innovative services solutions to our customers,” said Stan Deal, President and CEO, Boeing Global Services.
The proposed long-term partnership will create a competitive offering designed to meet market needs. Both companies will have a 50 per cent stake in the partnership, which will be based in the United States. The completion of the transaction is subject to customary conditions including regulatory and antitrust clearance. The deal is expected to close in the second-half of 2018.
Safran currently supplies a wide range of components to Boeing commercial and defense programs, including as a partner to produce CFM’s LEAP-1B engine for the 737 MAX (through CFM International, a 50/50 JV between Safran Aircraft Engines and GE). Boeing and Safran also are partners in MATIS, a joint venture in Morocco producing wiring products for several airframe and engine companies.
“This will represent a new step in the long-lasting and fruitful partnership between Safran and Boeing. Together we are committed to delivering advanced APUs and world-class support to our customers,” said Philippe Petitcolin, Chief Executive Officer of Safran. “This partnership will have no impact on our 2018 guidance nor on our plan to return Euro 2.3 billion cash to shareholders over 18 to 24 months.”
“This move will strengthen Boeing’s vertical capabilities as we continue to expand our services portfolio and make strategic investments that accelerate our growth plans,” said Greg Smith, Boeing Chief Financial Officer and Executive Vice President of Enterprise Performance & Strategy. “The establishment of the joint venture will have no impact on Boeing’s 2018 guidance or on our commitment to returning approximately 100 per cent of free cash flow to shareholders.”