Snecma plans to take full control of the Messier-Dowty landing-gear business just three years after the Anglo-French joint venture was founded in a 50/50 partnership, together with the TI Group. The company now plans to create a major landing-systems business, including its Messier-Bugatti brakes unit.
Under the terms of the original deal, the TI Group had been entitled to the lion's share of profits from the venture over the first three years, after which a review was due. The TI Group says that it was agreed at this stage that the joint venture, launched at the start of 1995, required a single owner and that Snecma was unwilling to sell.
Snecma's acquisition, to be completed by April for around £207.5 million ($352 million), also includes the TI Group's landing-gear repair and overhaul operation, which was never included within the joint venture.
The deal marks the conclusion of an alliance which was once billed as a model for European cross-border consolidation and also the sale of another major chunk of the Dowty business which the TI Group acquired in 1992 after a vigorous take-over battle.
Messier-Dowty posted sales of £247 million in 1996, with operating profits of £22 million, equipping all Airbus aircraft and recently breaking into the Boeing market with a deal giving it access to the 777. The TI Group's separate repair unit made $2 million on sales of $32 million.
Chairman Jean-Paul Bechat says that Snecma now plans to build a landing-systems business which will generate sales of £500 million and "become the world leader". In the past, Snecma had been close to selling ancillary businesses, including brakes, but Bechat's arrival in June 1996 led to a policy reverse.
The TI Group specialises in niche world engineering markets, and says that it is "committed" to the rest of the Dowty Aerospace business, which has sales of around £250 million in propellers, engine components and hydraulics.
Source: Flight International