ST Engineering enters into record $868m deal

The proposed acquisition will allow ST Engineering to scale up its aerospace capabilities.
The proposed acquisition will allow ST Engineering to scale up its aerospace capabilities.PHOTO: ST FILE

Purchase of US aircraft engine parts maker, its biggest acquisition, will scale up aerospace capabilities, says firm

Singapore Technologies (ST) Engineering is planning its biggest acquisition so far.

Its American subsidiary, Vision Technologies Aerospace, has entered into a US$630 million (S$868 million) deal to purchase a firm that makes aircraft engine parts.

MRA Systems (MRAS), based in Baltimore in the United States, has about 800 employees. It is currently owned by General Electric Company (GE).

MRAS has two business lines: the design, development, production and sale of engine components including nacelles, thrust reversers and aerostructures; and spare parts sales.

In an announcement yesterday, ST Engineering said it has been looking to invest in new growth areas, including businesses that offer competitive products through the ownership of intellectual property, and that are synergistic to its core businesses.

The acquisition will allow ST Engineering to scale up its aerospace capabilities.

Mr Vincent Chong, president and chief executive of ST Engineering, said: "ST Engineering keeps a constant lookout to acquire companies in our core business areas or adjacencies that will contribute profitable revenue streams and sharpen our competitive edge.

"We are excited by the prospects of our investment in MRAS, which is a high-value and complementary business that will enhance our scale and global reach, and capture synergies for the group."

ST Engineering is confident that the purchase is a good buy, partly because MRAS' next-generation programmes include the Airbus 320neo powered by CFM International's LEAP-1A engine.

ST Engineering is confident that the purchase is a good buy, partly because MRAS' next-generation programmes include the Airbus 320neo powered by CFM International's LEAP-1A engine, which is Airbus' new-engine option for its popular single-aisle A-320 aircraft family.

To date, airlines have ordered more than 6,000 A-320neo aircraft.

Mr David Joyce, vice-chairman of GE and president and chief executive of GE Aircraft Engines, said: "I am confident that ST Engineering is the right choice for the future."

Mr Lim Serh Ghee, president of ST Engineering's aerospace sector, said: "Moving upstream into the business of design and manufacturing of nacelles will allow us to benefit directly from the robust growth of the global aircraft fleet as an original equipment manufacturer, and enable us to serve our customers better through an enhanced suite of products and services."

A version of this article appeared in the print edition of The Straits Times on September 14, 2018, with the headline 'ST Engineering enters into record $864m deal'. Print Edition | Subscribe