General Electric has agreed to buy the aviation business of Italian aerospace company Avio for €3.3 billion or 8½ times 2012 earnings before interest, taxes, depreciation and amortisation, the firms said yesterday.

Avio will strengthen GE’s global supply chain capabilities as its engine production rates continue to rise to meet growing customer demand, said GE.

The US conglomerate will invest $1.1 billion in the next 10 years in the aviation assets it acquires from Avio, confirmed GE Aviation’s chairman and chief executive David Joyce.

Avio was acquired in 2006 by Cinven in a deal that valued the firm at about €2.6 billion. This deal will not include Avio’s aerospace unit. Avio revenues in the aviation sector were €1.7 billion in 2011, with more than 50 per cent derived from components for GE and GE joint venture engines. – (Reuters)