Safran Still Interested in Avio’s Space Business

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PARIS — France’s Safran aerospace engines group, which was bested by General Electric in the bidding to purchase Italy’s Avio, said Feb. 21 it remains interested in Avio’s space division.

In a conference call with investors, Safran Chief Executive Jean-Paul Herteman said Safran’s Herakles solid-rocket propulsion division has been working with Avio for more than 20 years on Europe’s Ariane rocket series.

Avio recently has expanded its solid-propulsion work with the arrival of the Italian-led Vega small-satellite launcher, which made its inaugural flight in 2012.

Turin-based Avio reported space division sales of 296.5 million euros ($383.1 million) in 2011, a 3.8 increase from 2010 that was attributed mainly to the work on Vega.

Avio is a 70 percent shareholder of ELV SpA, which is Vega’s prime contractor. The Italian space agency owns the remaining 30 percent.

General Electric’s $4.3 billion purchase of Avio in December did not include the space division, whose near-term prospects have improved since the November agreement by European Space Agency governments to start design work on a next-generation Ariane rocket, called Ariane 6.

Ariane 6 would use a Safran-built cryogenic upper stage and two solid-fueled lower stages. Government backers have said they are seeking maximum synergies with Vega to save costs, a decision that should bode well for Avio and for Safran’s Herakles.

“There are many complementarities and synergies” between Avio’s space division and Safran, Herteman said. But he also said it was unclear what the Italian government’s position would be on the possible sale of the space division to a non-Italian company.

“These subjects have a strategic importance for governments,” Herteman said, meaning the consolidation of Europe’s solid-rocket manufacturers will need to make political sense as much as business sense.

Safran and Avio have a joint venture company called Europropulsion that provides the solid-fueled strap-on boosters for Europe’s current Ariane 5 heavy-lift rocket.

Avio has a 3.4 percent stake in the Arianespace consortium of Evry, France. Safran has a 10.6 percent share.