The European Commission has cleared the planned joint-venture between Boeing Global Services and France’s Safran to design, build, and service auxiliary power units (APUs), saying its analysis concluded the tie-up will raise no competition issues.
“The Commission found that despite Boeing's strong position in the manufacturing of large commercial aircraft, the transaction is unlikely to lead to competing APU suppliers being shut out from the commercial aircraft APUs market,” the Brussels-based EU competition watchdog said Friday, adding that “in fact, the transaction will lead to the creation of a new entrant in that market.”
Boeing and Safran on June 4 announced their plans for the 50-50 APU joint venture, an initiative the two aerospace companies said will “benefit both customers and the industry at large.” The new company will base its headquarters in the U.S. and directly compete with the industry’s top two APU providers, Honeywell and Pratt & Whitney.
The APU venture reflects Boeing’s strategy to strengthen its vertical capabilities and expand its services portfolio while it stands to help expand Safran’s APU business into the market for large commercial transports. Safran has provided APU systems since 1962, mainly for helicopters, military aircraft and midsize and long-range business jets. In its analysis, the Commission noted limited overlaps between Safran and the joint venture given that Safran manufactures APUs for military aircraft and helicopters while the joint venture will manufacture APUs mainly for large commercial aircraft.