(Reuters) – Aircraft component supplier TransDigm Group Inc <TDG.N> said on Wednesday it would buy smaller rival Esterline Technologies Corp <ESL.N> for about $3.6 billion to add expand its aftermarket spare parts business.
The deal will give TransDigm more heft to compete with planemakers Boeing Co <BA.N> and Airbus SE <AIR.PA>, which are pushing into the high-margin business of supplying parts and services to boost profits.
The $122.50-per-share cash offer represents a 38 percent premium to Esterline’s Tuesday close and is 62 percent more than the stock’s closing price on July 19, when reports of the company exploring a potential sale emerged.
Shares of Esterline were trading at $116 before the opening bell. The company makes cockpit parts and sensors for commercial jetliners, business jets and military aircraft such as Lockheed Martin’s <LMT.N> F-35 fighter jets.
Reuters reported in July that Esterline was exploring a sale.
(Reporting by Arunima Banerjee in Bengaluru; Editing by Shailesh Kuber and Saumyadeb Chakrabarty)