A General Electric GE9X engine, which is used on the Boeing 777X. (GE)
Boeing and Safran will jointly design, build and service auxiliary power units used to start main engines and power onboard systems.
Both companies will have a 50% stake in the partnership, which will be based in the U.S. The completion of the transaction is subject to customary conditions including regulatory and antitrust clearance. The deal is expected to close in the second-half of 2018.
"This strategic partnership will leverage Boeing's deep customer and airplane knowledge along with Safran's experience in designing and producing complex propulsion assemblies to deliver expanded, innovative services solutions to our customers," said Stan Deal, Boeing Global Services' CEO.
Safran currently supplies a wide range of components to Boeing commercial and defense programs, including as a partner to produce the CFM LEAP-1B engine for Boeing's 737 MAX through the Safran-GE joint venture CFM International.
"Safran has contributed to prestigious international military and civil programs, providing reliable, high-performance APU systems since 1962. Together we are committed to delivering advanced APUs and world-class support to our customers," said Safran CEO Philippe Petitcolin, adding that the company's plan to return €2.3 billion to shareholders over the next two years would be unaffected.
Boeing CFO Greg Smith said the company remained committed to returning 100% of free cash flow to shareholders as well, and both men confirmed that 2018 their companies' 2018 guidance remained unchanged by the deal.