Boeing to buy Aviall for $1.7 bn
The deal marks the first major corporate move by Boeing?s new chief executive James McNerney, who took the helm 10 months ago.india Updated: May 02, 2006 11:31 IST
Boeing Co said on Monday it agreed to buy aerospace parts supplier Aviall Inc for $1.7 billion, as the planemaker looks to expand its services operations in the wake of a boom in new plane orders.
The deal marks the first major corporate move by Boeing’s new chief executive James McNerney, who took the helm 10 months ago.
Boeing is expanding its aviation services operations as it comes off a peak in commercial plane orders.
The Chicago-based company took a record 1,002 commercial plane orders in 2005, and European rival Airbus took 1,055, fueled by a resurgence in travel worldwide.
But orders are expected to fall short of that mark this year, suggesting that over the next few years supplying parts and maintaining existing planes will become more of an important part of planemakers' operations.
Boeing's Commercial Aviation Services unit is expected to bring in revenue of about $3 billion this year, which would expand by more than 40 per cent with the addition of Aviall. Boeing said it would pay $48 per share in cash for Aviall.