Safran to buy Zodiac Aerospace for 8.5 billion euros

PARIS, France - Safran, France-based aircraft engine company has decided to buy Zodiac Aerospace, a seat and cabin manufacturer.

The deal was said to be worth 8.5 billion euros.

Both the companies are based near or in Paris, and look forward to creating a "new global leader in aerospace."

According to the deal, Safran will offer 29.47 euros per share to Zodiac, the figure being 26.4 percent above the latter’s closing share price Wednesday. 

If it acquires more than 50 percent of the share capital of Zodiac, it will then merge the rest of the shares on basis of the ratio 0.485 Safran shares is to one Zodiac share.

Aside from this, according to the deal, Safran shareholders will receive a special dividend of 5.5 euros per share.

When Zodiac was asked whether the takeover would improve industrial performance at their facilities, whose delays in seat production have been noted, a spokesman for Airbus said "We will see.”

However, this deal requires that each of the shareholders approve it.

Francois Hollande, French President said in statement that the deal "will strengthen the French aeronautics industry."