Will Safran’s $1.8bn Collins Aerospace deal redefine flight control systems in the electrified aircraft era?

Safran SA (EPA: SAF) has finalized the long-anticipated acquisition of Collins Aerospace’s flight control and actuation activities, closing a $1.8 billion deal that cements the French aerospace and defense group as a global leader in mission-critical aircraft systems. Announced on July 21, 2025, and effective from August 1, the acquired business will be consolidated under Safran Electronics & Defense.

The Collins Aerospace unit, which generated approximately $1.55 billion in revenue and $130 million in EBITDA in 2024, employs around 4,000 people across eight major facilities in Europe and Asia, with additional operations in Poland, the United States, and India. Its systems are integrated into 180 commercial, military, and helicopter platforms, including flagship Airbus and Boeing models. Safran expects the acquisition to be accretive to earnings from year one, projecting $50 million in annual pre-tax cost synergies by 2028.

Olivier Andriès, chief executive officer of Safran, said that this deal represents a pivotal step toward consolidating leadership in mission-critical flight control and actuation functions. He emphasized that Collins Aerospace’s hydraulic and mechanical actuation expertise, combined with Safran’s electro-mechanical and electronic capabilities, strategically positions the group for next-generation and increasingly electrified aircraft platforms.

How does this acquisition redefine Safran’s market standing in flight control and actuation systems?

This acquisition expands Safran’s portfolio to include end-to-end hydraulic, mechanical, and electro-mechanical actuation systems, enabling the group to deliver comprehensive solutions to aircraft manufacturers. Institutional investors view the deal as transformative, citing its balanced exposure across commercial, military, and helicopter segments and its significant aftermarket revenue stream, which accounts for roughly 40 percent of the acquired business’s turnover.

Safran’s strengthened position in nacelle and helicopter actuation systems builds on its existing global leadership, while the new assets enhance its defense offerings for military aircraft and missile systems. With airlines and OEMs accelerating efforts toward greener, electrified aircraft, Safran’s integrated portfolio aligns with future demand for more-electric flight control systems in single-aisle and wide-body platforms.

What is the historical context behind Safran’s move to acquire Collins Aerospace’s actuation business?

Safran has been strategically consolidating its aerospace systems portfolio for over a decade. The $8.5 billion acquisition of Zodiac Aerospace in 2018 transformed Safran into a major Tier-1 supplier of aircraft interiors, seats, and cabin equipment. The Collins Aerospace deal fills a critical technological gap, allowing Safran to compete more directly with large integrated suppliers such as RTX Corporation’s Collins Aerospace and Honeywell.

Collins Aerospace’s actuation and flight control business itself has a long legacy, supplying hydraulic and mechanical systems for platforms like the Airbus A320neo, Airbus A350, Boeing 787 Dreamliner, and multiple military helicopters. Its strong installed base of over 6,000 units globally enhances Safran’s access to high-value aftermarket contracts.

The acquisition journey began in July 2023, with Safran estimating at the time that the business would generate $1.5 billion in revenue and $130 million in EBITDA for 2024. Regulatory reviews, particularly in Europe and the United States, delayed the deal, with competition authorities scrutinizing potential overlaps in trimmable horizontal stabilizer actuators.

What regulatory steps did Safran take to secure global approvals?

The European Commission granted conditional approval in April 2025 after extensive market testing of Safran’s proposed remedies. To address antitrust concerns, particularly regarding competition in high-stakes actuator systems, Safran agreed to divest its North American electro-mechanical actuation business—representing approximately $65 million in annual sales—to Woodward Inc.

The UK Competition and Markets Authority and the U.S. Department of Justice approved the transaction after similar remedy agreements, ensuring that competition would remain intact for critical flight control components. Safran stated that these steps were necessary to preserve its long-term strategy of building an integrated actuation business without compromising market fairness.

What financial and synergy benefits does Safran expect to realize from this acquisition?

Safran anticipates $50 million in annual pre-tax cost synergies by 2028, stemming from procurement efficiencies, consolidated R&D programs, and streamlined sourcing and production flows. Commercial synergies are also expected as Safran cross-sells a full suite of flight control and actuation solutions to aircraft manufacturers.

The transaction was funded entirely with available cash, underlining Safran’s financial flexibility and commitment to maintaining an investment-grade rating. Analysts expect the combination of cost optimization and recurring aftermarket revenues to boost Safran’s EBITDA margin over the medium term, with some projections placing margins closer to 20 percent by late this decade if integration targets are met.

What are the implications for the global aerospace supply chain and OEMs like Airbus and Boeing?

As Airbus and Boeing push forward with next-generation single-aisle aircraft that require lighter, more-electric systems, demand for integrated actuation and flight control solutions is expected to rise sharply. Safran’s ability to offer a combined hydraulic, electro-mechanical, and electronic portfolio positions it as a critical Tier-1 supplier in these programs.

Safran’s expanded scope may also help address ongoing supply chain challenges faced by major OEMs, including component delays that have slowed aircraft deliveries. By providing a broader range of systems under one roof, Safran could help manufacturers streamline procurement and integration processes, improving delivery timelines.

What should investors monitor in the coming quarters after this acquisition?

Institutional sentiment is cautiously optimistic, with analysts highlighting integration execution as a key risk factor. Aligning operations across eight facilities in Europe and Asia, consolidating R&D efforts, and maintaining high service levels will be critical to realizing the projected synergies.

Investors will also track Safran’s ability to secure new contracts for next-generation aircraft programs, particularly in the single-aisle and regional jet markets, where electrification trends are gaining momentum. Aftermarket performance will remain a significant revenue driver, and maintaining service quality during the transition will be vital to sustaining customer trust and long-term profitability.

Safran’s forward valuation, trading at a premium relative to peers, reflects high expectations for earnings growth and synergy realization. Any delays in integration or slower-than-expected uptake in next-generation aircraft programs could pressure the stock.

What does this deal mean for Safran’s long-term strategy?

This acquisition marks a turning point for Safran, not just as an expansion of product capabilities but as a strategic move to position itself for the future of aviation. By integrating Collins Aerospace’s actuation expertise, Safran is betting on an electrified and hybrid aircraft future, where advanced flight control systems will be critical to achieving fuel efficiency and decarbonization goals.

The enhanced portfolio also provides Safran with more leverage in defense programs, particularly for military aircraft and missile systems, reinforcing its role in sovereignty-focused defense initiatives.

Safran’s ability to balance cost discipline, accelerate synergies, and capitalize on emerging platform opportunities will determine whether this acquisition meets its promise of value creation and technological leadership in the coming decade.