A consortium backed by Airbus and Safran has agreed to buy superalloys supplier Aubert & Duval from Eramet after the French government stepped in to protect its strategic interests in the maker of fighter jet and submarine parts.
The preliminary deal comes more than a year after mining group Eramet (ERMT.PA), launched a review of its loss-making specialist metal alloys business and entered talks with Airbus (AIR.PA), jet engine maker Safran and Tikehau Ace Capital.
The provisional agreement, which the parties expect to finalise before year end, gives the loss-making A&D business an enterprise value of 95 million euros ($107.3 million), Eramet said.
It marks a new step in the overhaul of Eramet whose activities are concentrated in mining and processing nickel and manganese for steel firms. It has shifted focus recently to developing raw materials for electric vehicle batteries.
Eramet pre-announced an accounting charge of 340 million euros in 2021 results due on Wednesday, in connection with the deal, adding there would be no impact on group debt.
Eramet shares fell around 4% at the opening in Paris, before bouncing back to trade up to 2% higher.
The charge includes specific guarantees that Eramet has provided to the buyers for any quality problems in the wake of issues experienced at A&D, a spokesperson said.
On Sunday, the French government, Eramet’s second-largest shareholder, paved the way for a sale by issuing a “golden share” related to certain A&D assets, which will be maintained following the transfer of control to new owners and give the government a final say on defence interests.
The government already has veto-wielding golden shares in ArianeGroup, which builds Ariane space launchers and French ballistic missiles under the joint ownership of Airbus and Safran, and satellite imaging firm Airbus DS Geo.
A&D’s advanced superalloys are used in engines for the Rafale fighter and the LEAP commercial engine, co-produced for Boeing and Airbus by Safran and General Electric.
Airbus is the biggest direct customer for A&D, which also supplies parts for French missiles, warships and artillery as well as the country’s large nuclear-power sector.
Airbus, Safran and Tikehau will have equal shares in A&D. The trio said the deal would allow them to secure strategic supply chain materials for civil and military projects.
The French government owns 25.6% of Eramet, 12% of Safran and 10.9% of Airbus, though its role in the European planemaker is restricted to overseeing defence interests.
Source: Reuters.com