Airbus sells off Defense Electronics business

Posted on 8 Mar 2017 by Michael Cruickshank

European defense and aerospace company, Airbus Group has this week announced that it has finalized the sale of its Defense Electronics subsidiary.

Defense Electronics produced high-tech systems and sensors for use in a number of military applications. Based in Germany, but with offices around the world, the subsidiary had a workforce of more than 4000 people.

The subsidiary itself is slated to be sold to US-based private equity firm, KKR for a sum of approximately $1.1bn.

Airbus had announced its intent to sell the company several months ago, however only recently received approval from German regulators. Before all parts of the company can be sold, however, French regulatory approval will also be required.

Once the transfer is complete Defence Electronics will be formally renamed ‘Hensoldt’. Airbus, however, will maintain a minority stake in the company for a number of years.

Airbus stated that its decision to sell off the company was part of efforts on their behalf to ‘streamline’ its defense business.

“We are pleased to finalize this transaction, which represents another major step forward in the strategic rationalization of Airbus’ defense activities,” said Dirk Hoke, CEO of Airbus Defence and Space.

“After streamlining our portfolio we are now well positioned with a clear focus on smarter products, more service-based offerings and accelerating digital innovation.”

Airbus is currently in the process of re-focusing its efforts on aerospace, and aerospace-related defense systems, rather than maintaining a more eclectic mix of subsidiaries.

Nonetheless, the Defense Electronics saw considerable success last year, generating more than €1bn in sales across several countries.

KKR remarked that it has high hopes for the future of the company given its functional know-how.

“KKR will support the growth and development of Hensoldt into a leading European defense company with its financial resources and its extensive experience building successful industrial companies,” said Johannes Huth, Member and Head of KKR Europe, Middle East, and Africa

Currently, there is no information available on whether any job losses will follow the sale of Defense Electronics.