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Aerospace firm now a bigger deal in security

FRENCH aerospace and technology group Safran is to buy 81 percent of GE Homeland Protection for US$580 million, boosting Safran's presence in the security market and giving General Electric much-needed cash.

GE Homeland Protection provides equipment and services to protect airports, ports and national borders. United States conglomerate GE will still own a 19 percent stake in the company following the deal with Safran.

Safran said the GE Homeland Protection acquisition - which will be paid in cash from existing reserves - would boost its share of the security services sector.

For GE, the sale raises cash for the bellwether US group which has been hit by the financial crisis and forced to cut its dividend.

"This makes Safran a pivotal player in the security market, a business that will generate 20 percent of the group's total revenues in the medium term, with double-digit profit perspectives and reducing exposure to aerospace cycles," Safran Chief Executive Jean-Paul Herteman said.

HMG Finance fund manager Francois Garnier said while the acquisition appeared expensive, it was a good strategic move.

GE Homeland Protection had sales of US$260 million in 2008 - meaning that Safran is paying more than two times turnover to buy the controlling stake.


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