P&W reviewing implications of GE proposal to acquire Avio

Washington DC
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Pratt & Whitney says it is reviewing its options after General Electric announced an agreement to buy Italian engine parts maker Avio, which is a critical supplier to both companies.

"We're evaluating this transaction and determining the best course of action for our business," P&W says. "Until we've completed our evaluation it is inappropriate to speculate on any potential implications."

The $4.3 billion acquisition of Avio's non-space business by GE, which is pending government approvals, could create an unusual competitive dynamic with P&W.

In addition to supplying key components of GE engines, Avio also is a major supplier to P&W. Avio's contributions include the fan drive gear system for the PW1524G powering the Bombardier CSeries, the merits of which have been criticised by Avio's potential new owners at GE.

GE and Snecma are equal partners in the CFM International joint venture that produces the competitor to P&W's geared turbofan - the Leap engine series. Avio is also a major partner to Snecma in building components on the Leap engines.

Aerospace companies often compete and collaborate on different projects even at the level of the original equipment manufacturer. GE and P&W compete in the narrowbody sector, but collaborate on the GP7200 engine for the Airbus A380.

GE says it expects Avio to keep its portfolio of existing customers after the acquisition closes.

"It is common for engine manufacturers to supply components for other engine manufacturers," GE says.