NEW YORK CITY -- General Electric (IW 500/5) said on Friday that it would buy the aviation activities of Italian engine maker Avio for $4.3 billion, but Avio's space division is to be retained by the company's present owners, the investment fund Cinven and aerospace company Finmeccanica.
GE said that the acquisition would bolster its position in jet propulsion, and "will strengthen GE’s global supply chain capabilities as its engine production rates continue to rise to meet growing customer demand."
GE also expects the deal to reinforce its profit margins, the company said.
GE chief executive David Joyce said, "Avio has technologies, capabilities and outstanding engineers to help grow our business."
Avio has worked with GE since 1984, supplying components for several of GE's jet and helicopter engines, and the U.S. group said it was now in a position to "create additional opportunities to offer Avio's products and services beyond the aviation industry."
GE is already present in Italy, where it employs more than 7,000 people at more than 20 locations, including a research and development centre.
Avio employs 5,300 staff, of which some 4,500 are in Italy.
Copyright Agence France-Presse, 2012