Thursday, January 19, 2017

The TAKEOVER bid for Zodiac, a master stroke of Saffron –

His predecessor Jean-Paul Herteman dreamed, Philippe Petitcolin was done. Seven years after the failed attempt of 2010, Saffron is going to put his hand on his fellow Zodiac Aerospace, creating a giant French of 21 billion euros of turnover. According to information from Figaro, the engine manufacturer and oem aerospace has launched a TAKEOVER bid to 10 billion euros on the Zodiac, accepted by the families (Domange and Marechal, in particular) who hold the control of the group. The offer promote the French champion of the seating and cabin facilities to 8.5 billion euros, against 6,77 billion market capitalization Wednesday evening., Saffron picking in addition to the almost 1.5 billion euros of debt. The TAKEOVER is expected to be approved this Thursday, January 19, at a general meeting of Zodiac at Port-Marly (Yvelines) Saffron has been advised by Lazard and Merrill Lynch Bank of America, Zodiac by Rothschild and BNP.

Response to the mergers-u.s.

The operation is a big smoking to the director-general of Safran, Philippe Petitcolin, a few months after the sale of the security division Morpho for about 3 billion euros. With this acquisition, which will see the family shareholders and their allies of the family Peugeot fund (FFP) to hold approximately 10% of the new group (like the State), the group balances its activities between the engines, which accounted for two-thirds of its sales, and aircraft equipment. These account for 10 of the 21 billion euros of sales of the new set. Importantly, this TAKEOVER 100% French meets the major maneuvers the u.s. in recent years, as the reconciliation between the u.s. Rockwell Collins, and B/E Aerospace in October 2016, or the merger of a giant UTC-Goodrich 2011 (18.4 billion dollars).

In a joint statement, Safran and Zodiac indicate that the new group, to 21.2 billion euros of turnover and 92,000 toö employees (including 45.000 in France) will be the number three global aviation (excluding aircraft), and the number two oem in the sector. The new entity hopes to 200 million euros of annual synergies, of which 50% would be achieved in the first year and 90% the second. It will be able to offer a wide range of equipment of aircraft and hlicoptères : engines of course, but also landing gear, brakes, nacelles, hydraulic and electrical systems, oxygen systems, water slides, drainage, lighting, seats, toilets, galleys.

Zodiac weakened

How Philippe Petitcolin has he been able to accept the family shareholders of the Zodiac that they had roundly refused to Jean-Paul Herteman in 2010 ? First, the context has changed. The difficulties in industrial Zodiac on its activities to the seats and toilets for airplanes, since the end of 2014, have shaken the group to : production delays caused the ire of Airbus and Boeing, and the stock price, after years of growth, has lost 30% since march, 2015. The plan Focus, launched to transform the Zodiac of a federation of SMES in the real built-in group takes time to give results. The redemption of B/E Aerospace, the main competitor of Zodiac in the seats, by Rockwell Collins in October last, showed that the competition would still harden. And has probably completed to convince the families that Zodiac would be better armed within a large group.

Philippe Petitcolin, which was the successor to Jean-Paul Herteman in April 2015, has also been able to carry out skillfully with his ship. By reselling the security branch Morpho for a good price (€3 billion), it has refocused the group on the aerospace and defense, and he has given the means of its offer on Zodiac, which mijotait within a dedicated team from the end of 2015. Saffron had a billion of debt by mid-2016 : with three billion of the assignment of Morpho and a strong profitability (operating margin of 14.6%), it could launch without issue a TAKEOVER bid. More importantly, in spite of poussives attempts of refutation, the Zodiac had been open these past few months, his boss, Olivier Zarrouati, ensuring that he would consider any offer that would allow the oem to strengthen.

Petitcolin extended for a further three years

The ceo of Saffron is now in a position of strength for renewal in 2018, despite the age limit of 65 years that he will then be achieved. A modification of the age limit from 65 years to 68 years, will be proposed to the next general assembly. Philippe Petitcolin will remain ceo of the new group, with the boss of Zodiac, Olivier Zarrouati appointed as director general delegate. The chairman of the board of Safran Ross McInnes will also head the new group.


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