Safran (EPA: SAF), a maker of aircraft engines, has agreed to acquire Zodiac Aerospace (EPA: ZC), which manufactures plane seats and cabins, for roughly €10 billion in a deal that’s set to transform the French aerospace industry. The move comes less than a year after Zodiac was reprimanded by the France-based Airbus for delays on equipment delivery—the sort of thing many interested parties in the nation hope Safran’s takeover will help prevent in the future. In a statement, French President Francois Hollande called the merger “a beautiful industrial operation.”
To finance the deal, Safran will pay €29.47 per share of Zodiac stock, as well as 0.485 Safran shares for each Zodiac share. Prior to and conditional upon completion of the deal, existing Safran shareholders will receive a special €5.50 per-share dividend. The purchase price represents a 36% premium to Zodiac’s three-month volume-weighted share value prior to the deal. Safran’s stock dipped more than 5% in the wake of the deal’s announcement, ending Thursday at €63.62 per share, while Zodiac finished the day trading up nearly 23% at €28.65 per share.