(Reuters) - Aircraft component supplier TransDigm Group Inc (N:TDG) said on Wednesday it would buy smaller rival Esterline Technologies Corp (N:ESL) for about $3.6 billion to add expand its aftermarket spare parts business.
The deal will give TransDigm more heft to compete with planemakers Boeing Co (N:BA) and Airbus SE (PA:AIR), which are pushing into the high-margin business of supplying parts and services to boost profits.
The $122.50-per-share cash offer represents a 38 percent premium to Esterline's Tuesday close and is 62 percent more than the stock's closing price on July 19, when reports of the company exploring a potential sale emerged.
Shares of Esterline were trading at $116 before the opening bell. The company makes cockpit parts and sensors for commercial jetliners, business jets and military aircraft such as Lockheed Martin's (N:LMT) F-35 fighter jets.
Reuters reported in July that Esterline was exploring a sale.