Airbus Group sells defense electronics unit to KKR for $1.2B

The Airbus Group announced today it had agreed to sell its Ulm, Germany-based defense electronics business to investment firm KKR for 1.1 billion Euros, or $1.2 billion.

"This is a significant step forward in the portfolio reorganization announced by the Airbus Defence and Space Division in September 2014," according to an Airbus statement. "The transaction is expected to close in the first quarter of next year and is subject to customary closing conditions, including regulatory approvals and employee consultation."

Airbus Defence and Space CEO Bernhard Gerwert said: "This is an excellent outcome for our Orlando process which aimed at repositioning Defence Electronics for the future with an excellent outcome for all stakeholders. Defence Electronics is a strong, profitable business with significant growth potential and we are convinced that KKR and the Defence Electronics management team and employees will continue to strongly develop the business going forward."

Airbus Group will maintain a minority stake in the unit "to ensure a smooth and seamless transition for the business, its employees and partners," according to the statement.

Johannes Huth, head of KKR Europe, Middle East and Africa, said: "We are delighted to have been chosen as the best partner for the defence electronics business. KKR will support the growth and development of the company with its financial resources, international network, long-standing expertise in the global industrial sector and its extensive experience building successful industrial companies in Germany, such as MTU Aero Engines, Demag Cranes and Kion."

The Defence Electronics business includes around 4,000 employees worldwide, with annual revenues of around 1 billion Euros, or $1.1 billion.